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Russian revenues fall sharply due to Western sanctions | Abroad

Russia is getting less and less money from selling oil and gas. The Western sanctions over the war in Ukraine, which entered a new phase on Sunday, seem to be having an effect. Russian petroleum products such as diesel and kerosene are now also subject to an import ban within the European Union.

Because of the sanctions from the West, more oil remains to be shipped overseas. However, Russia will only get rid of those loads at hefty discounts. Despite a growth in the amount of oil exported by sea, revenues are still falling as a result.

The total amount of oil shipped by sea rose by 125,000 barrels per day in recent weeks. That number is the highest since June. But the increase was almost completely offset by a contraction in the amount of Russian petroleum shipped via oil pipelines to Germany and Poland. It reached 120,000 barrels per day last month, compared to 510,000 barrels per day last summer.

Russian oil revenues, which Moscow can use to finance the war in Ukraine, fell by $7 million to $50 million last week.

LOOK. The G7 – the seven richest industrialized countries – and Australia reached an agreement on a price cap for Russian oil in early December

Indian in China

The countries of the European Union have not been importing crude oil from Russia since December 5. Around that time, the G7 reached an agreement on a price cap for Russian oil. And now this also applies to petroleum products from Russia, such as diesel and kerosene. Last month, Russian oil did go to India and China, among others.

At the end of last week, Russia warned that the European embargo on refined petroleum products such as diesel would “unbalance international markets even further”. Kremlin spokesman Dmitry Peskov promised Russia would take steps to protect its interests.

Income fell sharply

According to the Russian Ministry of Finance, combined revenues from oil and gas in January were no less than 46.4 percent lower than a year ago. Overall, Russian revenues fell 35 percent from January last year. And that while expenditure, partly due to the war, is almost 60 percent higher than a year ago.

Budget deficit is rising

Several Russian officials are minimizing the impact of Western sanctions and embargoes on Russian revenues, but according to Russian Finance Minister Anton Siluanov, the budget deficit could increase further in the course of 2023 as a result of sanctions.

New sanctions

The European Union has already announced a series of new sanctions by February 24, exactly one year after the invasion of Ukraine. And the United States plans to impose a 200 percent import tariff on Russian-made aluminum, according to Bloomberg news agency. If the monster levy actually comes into effect, it will probably mean the end of aluminum imports from Russia, which is the second largest producer of the metal after China. Traditionally, the country accounts for about 10 percent of US aluminum imports, but recently that share has dropped to about 3 percent.

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