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Last year, Russia’s budget revenues from taxes on the oil and gas sector declined by 24 percent compared with the prior period. The Ministry of Finance reported that the state gathered 8.82 trillion rubles, which is about 99.3 billion US dollars, in oil and gas taxes. The drop in energy export income is linked to lower global oil prices and intensified Western sanctions. Revenues from pipeline gas sales to Europe also decreased sharply. Bloomberg notes that the state provided subsidies to the sector totaling 2.9 trillion rubles in support of industry needs.

In 2023, the average price of Russian Urals crude dipped by more than 17 percent, settling near 62.99 dollars per barrel, a level above the G7 price cap of 60 dollars. Nevertheless, risk premiums around sanctions kept the Urals discount to Brent at about 14 dollars in December. The report highlights that gas exports to the European Union via pipelines fell significantly, with deliveries shrinking by roughly two thirds. The International Energy Agency estimates Russia supplied between 20 and 25 billion cubic meters of gas to Europe, down from around 60 billion cubic meters the year before. Budget receipts from gas export taxes dropped to 566 billion rubles, marking a substantial reduction in energy tax yield.

Earlier projections indicated the 2023 budget deficit would be around 3.24 trillion rubles, according to official finance statements. Analysts have previously examined how much additional revenue could be expected from oil and gas, considering fluctuating prices, sanctions, and shifts in demand across key markets. The overall picture shows a country navigating a complex mix of price volatility, policy constraints, and external pressures that shape the energy sector’s contribution to public finances.