Page 90 - RusRPTJun24

5.0 External Sector & Trade 5.1 External sector overview
Russia’s foreign trade has stabilized at a new baseline of ~$100bn in exports and ~$75bn in imports per quarter. Somewhat weaker imports in Q4 2023 (of $66.8bn) led to a marginal increase in the trade balance (to $34.4bn).
Russia’s oil export revenues remain high as energy sanctions fail to offset rising global prices. Improved external dynamics are helping to stabilise the ruble and support the budget. Although there is a risk that Russia will face economic vulnerabilities in the future due to reduced macroeconomic buffers, more action is needed now to stop Russia’s brutal war in Ukraine, according to the May edition of the KSE Institute’s chart book.
Higher oil prices have supported Russia’s export earnings, with oil revenues reaching $17.2bn in April. Global oil prices continued to rise, with Brent reaching an average of $90/barrel. Meanwhile, the Russian crude export price was $77.2/barrel. As the US Treasury’s vessel designation campaign remained on hold (with 41 tankers sanctioned), the discount on export prices was essentially unchanged. Altogether, Russia has been generating substantial extra earnings due to these price dynamics. From January to April 2024, crude oil and oil product exports averaged $570mn per day—a 22% increase over the same period in 2023. At this rate, oil and gas revenues will fully cover the military budget this year.
Russia’s trade surplus dropped by half in April compared to March due to weaker exports, especially non-oil ones. Despite monthly fluctuations, the external environment is much more supportive than a year ago. The trade surplus grew by 14%, from $37.2bn in January-April 2023 to $43.7bn in the same period of 2024. The current account surplus more than doubled from $15.6bn to $31.7bn as deficits in services, income, and transfers declined. Along with actions taken by the CBR, improved foreign currency inflows have stabilized the ruble.
US secondary sanctions are impacting Russia’s exports. After the imposition of Western sanctions on high-tech imports, Russia importers adapted, and started buying goods from neighboring countries — particularly Kazakhstan, Armenia, Kyrgyzstan, and Turkey. At the same time, foreign trade statistics for those countries showed a spike in imports from the U.S. and Europe. In effect, they became channels through which Russia acquired sanctioned goods. China played a similar role.
90 RUSSIA Country Report June 2024 www.intellinews.com