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spike in prices. Last week Urals prices rose to some $65 per barrel, but about half of Russia’s crude is still carried by Greek tankers, an EU member, Institute of International Finance (IIF) reports. In addition, Russia has built up a massive “ghost fleet” of tankers that operate entirely outside of the sanctions regime and sell Russian crude to “friendly” countries that are ignoring the oil price cap regime – mostly China and India.
OPEC meets again this week, but it is not expected to cut production again, but with instability building in Libya supplies may be hit again in the coming weeks which could push prices up further.
As leading oil experts Chris Weafer, the founder and CEO of Macro Advisory and former head of research at multiple Moscow-based investment banks, and Christoph Ruehl, Senior Research Scholar at the Centre on Global Energy Policy, Columbia University, and the former chief economist at BP, told bne
IntelliNews in a podcast on oil in February, it does appear that the huge January deficit was an aberration, caused by the new sanctions and the
subsequent change in delivery routes and customer base, and that the Russia’s budget revenues will continue to pick up over the rest of the year as the market continues to adjust to the new realities.
In previous non-crisis years, Russia’s average monthly oil revenues have run at a level of between RUB250bn and RUB400bn a month depending on oil price dynamics, however, the monthly income has regularly risen as high as RUB1 trillion in a month on oil price spikes. However, in bad years, such as 2015, when the sanctions regime was first introduced, the monthly deficit can fall by RUB1 trillion a month as well.
In 2021, the last normal year before the war started, the average monthly budget income was RUB250bn, rising to RUB400bn per month in 2022. If the results of 2022 for the remaining months of the year were repeated then Russia would end the year with no deficit at all.
59 RUSSIA Country Report August 2023 www.intellinews.com