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Forecast 2023: Russia earns more from gas and oil – for the time being

2023-01-18T06:28:29.929Z

Despite Western sanctions, Russia was able to increase its revenues from the sale of gas and oil in 2022. But in 2023 the tide could turn for Vladimir Putin.



Despite Western sanctions, Russia was able to increase its revenues from the sale of gas and oil in 2022.

But in 2023 the tide could turn for Vladimir Putin.

According to the Moscow government, Russia's revenues from the sale of gas and oil rose by almost a third last year despite Western sanctions.

According to the Interfax agency, Russian Deputy Prime Minister Alexander Novak said the corresponding budget revenue in 2022 would have grown by 28 percent or 2.5 trillion rubles (around 31.6 billion euros at the end of 2022) compared to the previous year.

Gas and oil revenues: Russian economy remained robust despite sanctions

In the course of the Russian war of aggression against Ukraine, gas has not been pumped to Europe through the Baltic Sea pipeline Nord Stream 1 for months, and the Nord Stream 2 pipeline has never been put into operation.

Against this background, the export of conventional natural gas has fallen, said Nowak.

But the export of liquefied natural gas increased by eight percent to 46 billion cubic meters.

Oil exports have increased by seven percent.

Overall, the Russian economy proved to be more robust in 2022 than the West had hoped: According to the state statistics agency Rosstat, Russia's gross domestic product (GDP) fell by just 1.6 percent in the first three quarters of 2022.

However, this number should be treated with caution.

In her forecast for 2022 as a whole, the President of the Russian Central Bank, Elvira Nabiullina, is still assuming a decline in GDP of 3.0 to 3.5 percent - instead of the strong growth that was expected before the Ukraine war.

Expert: "2023 will be a significantly worse year for Russian commodity exports than 2022"

2023 could be an even bleaker year for the Russian economy, as a key tool – the oil price cap introduced by the EU in early December – is only likely to start showing its full impact this year.

The regulation is intended to force Russia to sell oil to buyers in other countries for a maximum of $60 per barrel (159 liters).

The Russian Ministry of Finance announced last week that it was already expecting lost oil and gas revenues of 54.5 billion rubles (around 737 million euros) in January.

The impact of the sanctions and price cap is "as significant as expected," says Lauri Myllyvirta, senior analyst at CREA, the Finland-based Center for Research on Energy and Clean Air that has been studying the impact of the sanctions.

"This shows that we have the tools to help Ukraine prevail against Russian aggression," he told

Der Spiegel

.

Kremlin chief Vladimir Putin has in turn banned the sale of oil to countries that have decided on a price cap for the raw material.

The ban comes into effect on February 1.

According to experts, that won't help the Kremlin much: "2023 will be a significantly worse year for Russian commodity exports than 2022," explains Janis Kluge from the Berlin Foundation for Science and Politics to the

Handelsblatt

.

The new sanctions pose "major obstacles" to Russian exports: "Russia must push its oil onto the market at high discounts."

With material from the dpa

Source: merkur

All news articles on 2023-01-18

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