Russia's Oil and Gas Earnings Plummet Amid Global Price Dips

Russia's oil and gas revenue dropped significantly by 35% in May compared to last year, attributed to falling global oil prices and a strong rouble. This decline could impact Russia's resistance to future OPEC+ output hikes as oil revenue forms a crucial part of its federal budget.

Russia's oil and gas revenue experienced a significant drop, declining by 35% in May compared to the previous year, according to data released by the finance ministry on Wednesday. The monthly revenue amounted to 512.7 billion roubles ($6.55 billion), which might challenge Russia's resistance to upcoming OPEC+ oil output hikes.

The revenue also witnessed a 53% reduction from April, a situation exacerbated by declining global oil prices and a strengthening rouble. Oil and gas earnings, historically contributing about a quarter to half of Russia's federal budget, remain a critical economic component for the Kremlin.

Furthermore, eight key OPEC+ members have decided to raise production by 411,000 barrels per day from July. Within this group, Saudi Arabia and Russia faced challenges, eventually making a difficult compromise regarding OPEC+ policies, with Saudi Arabia favoring increased output and Russia advocating a pause.

(With inputs from agencies.)