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Total revenues for Russia’s largest oil and gas exporters plunged by 41% between January and September compared to the same period last year, due to lower commodity prices and lower exports, Russia’s central bank said on Thursday.
Oil and gas production and exports have dropped this year, the Bank of Russia said in a financial stability review on Thursday. Re-directing oil and gas exports requires significant investment, and changes in the nature of transactions are raising the lead times for receipt of payments.
“The process of moving away from the use of the U.S dollar and other “toxic” currencies in international payments continues,” the central bank said.
The move away from the dollar has impacted the supply and demand of currencies on the domestic market, the bank noted.
Over the first nine months of the year, the share of Chinese yuan in payments for Russia’s oil and gas exports jumped from 13% in January to 35% in September. The share of the exports in Russian rubles also remains significant – at 39% in September 2023, the Bank of Russia said.
Due to the significantly lower Russian natural gas exports to the EU, Russia’s natural gas production fell by 11.4% year-over-year between January and September.
Similarly, due to the EU embargo on Russian oil and fuels, the volume of oil exports via the system of pipeline monopoly Transneft declined by 8% annually in the first nine months of 2023, the central bank said.
During the same period, the average price of the flagship Russian crude grade, Urals, slumped by 26% compared to January-September 2022.
While Russia’s companies are feeling the pinch from lower commodity prices and lower exports, the Russian state continues to see a steady income from oil and gas exports.
Russia’s oil and gas revenues jumped in October, due to a cyclical surge in the profit-based tax, and more than doubled from September to $18.3 billion (1.635 trillion Russian rubles), data from the Russian finance ministry showed early this month.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com