Russia's Oil and Gas Revenue Surge Fuels Economic Fortunes

Russia's oil and gas revenue from January to September is projected to rise by 49% year-on-year to 8.3 trillion roubles due to higher oil prices and a weaker rouble. This sector remains a vital source of federal budget income. Defence spending has increased amid ongoing geopolitical tensions.

Russia's oil and gas revenue in the first three quarters of the year is set to rise by 49% year-on-year to 8.3 trillion roubles ($89.4 billion), according to Reuters calculations.

This surge is largely attributed to higher oil prices and a weaker rouble, solidifying oil and gas as crucial sources of Kremlin's cash, accounting for a significant portion of the federal budget proceeds over the past decade. Preliminary data projects September's revenue at 779 billion roubles, reflecting a 5% increase from September 2023, and mirroring August 2024 figures.

The average price of Russia's Urals oil grade climbed to $69.88 per barrel in the first eight months of the year, a notable rise from $56.61 in the same period in 2023. Despite planning for federal revenue of 10.7 trillion roubles from oil and gas sales in 2024, a 21% increase from 2023, the initial target of 11.5 trillion roubles was revised down. Increased defence and security spending following the Ukraine conflict has led to consecutive annual deficits exceeding 3 trillion roubles, about 2% of GDP.