Russia Update: September 4, 2015

President Vladimir Putin speaking at the Eastern Economic Forum in Vladivostok on September 4, 2015. Photo by Evgeny Byatov

Revenue from Russia’s export of oil has dropped by 42% to $56.23 billion during the first seven months of 2015, says RBC.ru.

Welcome to our column, Russia Update, where we will be closely following day-to-day developments in Russia, including the Russian government’s foreign and domestic policies.

The previous issue is here.

Special features:

– â€˜I Was on Active Dutyâ€™: Interview with Captured GRU Officer Aleksandrov
– Meet The Russian Fighters Building A Base Between Mariupol And Donetsk
– ‘There Was No Buk in Our Field’
– With Cash and Conspiracy Theories, Russian Orthodox Philanthropist Malofeyev is Useful to the Kremlin

UPDATES BELOW

Where Will France’s Mistral Ships Go Now That Russia Isn’t Buying?

2015-09-04 16:25:50

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Revenues from Russia’s Oil Exports Drop 42% to $56 Billion

2015-09-04 14:40:19

Revenue from Russia’s export of oil has dropped by 42% to $56.23 billion during the first seven months of 2015, RBC.ru reported citing a report from the Federal Customs Service (FTS).

In the first seven months of 2014, Russia had earned about $97 billion.

Russia has tried to prevent the fall in revenues by increasing the volumes exported by 7.2% compared to the same period last year or from 131 million tons to 140.6 million tons.

Revenue from export of petroleum products, despite the increased volumes, fell 37%, from $70.5 billion to $44.4 billion. In fact revenue from all of Russia’s exports fell 30.6% to $210.5 billion. Fuel and energy exports made up 68.5% of these.

The FTS says that Russia’s energy exports increased — power by 20.4%, kerosene by 36.7%, diesel fuel by 11.4% — although the volume of gas deliveries remained at the same level as last year and coal deliveries reduced by 3.4%.

Vice Premier Arkady Dvorkovich stated that Russia’s budget for the coming year had been based on prices of oil of $60 a barrel, while taking into account that it could fall to $40. Today the value of the ruble has fallen to 67.48 to the dollar and the price of Brent crude is at $50.09, according to zenrus.ru.

Yet speaking at the Eastern Economic Forum today in Vladivostok, President Vladimir Putin said he sees “nothing dramatic” in the instability of prices for oil.

The drop in world oil prices has obviously affected Russia’s revenue, but it is likely that the stalling of an agreement with China, which in any event was to sell oil at prices less than desirable, has also had an impact. Russia is now facing an indefinite delay in the final signing of the contract for Russia’s state monopoly Gazprom to supply China with gas through the new Siberian Power pipeline due to declining Chinese demand.

The increased availability of liquefied natural gas (LNG) from countries such as Australia has also lowered demand from China, says Valery Nesterov an analyst from Sberbank.

The signing of the preliminary agreement with China last year was seen as a way for Putin to compensate for losses from Western sanctions over the war in Ukraine, and position himself for a possible weaning of Europe from its current dependency on Russia for 30% of its gas, about half of which is delivered across Ukraine.

— Catherine A. Fitzpatrick