Russia Oil and Gas Revenue Surges 39% Year-on-Year in May on Iran Conflict
Overview of Russia's Oil and Gas Revenue Growth
May Revenue Surge Driven by Global Oil Price Rally
MOSCOW, May 20 (Reuters) - Russia's state oil and gas revenues, which account for around a fifth of total budget income, are set to rise by 39% year on year in May to 700 billion roubles ($9.8 billion), thanks to a global oil price rally fuelled by the war in Iran, Reuters calculations showed on Wednesday.
Month-on-Month Decline and Taxation Factors
However, revenues are expected to decline from April by around 17% due to cyclical payments of profit-based tax. Russia's budget will also lose out from increasing subsidies to the refineries in the form of the reverse excise tax and damper payments.
Impact of Geopolitical Events on Russia's Oil Sector
Benefiting from the U.S.-Israeli War in Iran
Russia, the world's third-largest oil producer and exporter after the U.S. and Saudi Arabia, has been one of the main beneficiaries of the U.S.-Israeli war in Iran, which started at the end of February.
Oil and Gas Revenue as a Key Kremlin Income Source
Oil and gas revenue is the main source of income for the Kremlin, whose finances have been strained by heavy defence and security spending since Russia began its military campaign in Ukraine in February 2022.
Budgetary Trends and Future Projections
Recent Decline in Oil and Gas Revenue
According to Reuters calculations, Russia's federal budget's oil and gas revenue declined by around a third year on year to 3 trillion roubles in the January to May period.
Future Revenue Forecasts
2026 Budget Projections
Russia's 2026 budget forecasts oil and gas revenue of 8.92 trillion roubles. Total budget revenue this year is projected at 40.283 trillion roubles.
2023 Revenue Performance
Last year, federal budget oil and gas revenue dropped 24% to 8.48 trillion roubles, the lowest level since 2020.
Additional Information
($1 = 71.2500 roubles)
(Reporting by Reuters, Editing by Louise Heavens)
