Russia's August energy revenue slump weighs on budget surplus
Quantum Commodity Intelligence - Russia's energy revenues slumped in August and government spending soared, eating into a budget surplus as crude prices slipped through the summer, according to official data.
Finance ministry data showed a significant downturn in Russia's budget surplus as further signs emerged of Western sanctions taking their toll on the economy, with a chunky RUB 1.5 trillion ($24.9 billion) treasury surplus at the start of the year now just RUB 137.4 billion, according to the August data.
The showed a third successive month of deficit spending in the Russian budget even as energy prices remain elevated, with the August total some RUB 345 billion in the red as government spending picked up.
While finding accurate data on Russian energy output and export has become increasingly difficult since Moscow launched an attack on Ukraine in February, data published this week has shown energy export revenues have started to wane.
Finance ministry data shows oil and gas revenues for January-July were running some 43% higher year-on-year at RUB 7.8 trillion, but the figure for August then slipped to its lowest level in 14 months at RUB 672 billion.
That came as crude oil prices fell from June highs of $125/b to as low as $92/b in August. That has been further impeded by Russian firms having to sell at a significant discount to benchmarks in order to attract customers.
The decision earlier this month to completely shut off the Nord Stream 1 natural gas pipeline to Germany will put extra stress on government coffers as revenue sources evaporate, with gas exports to Europe around a third of pre-invasion levels.
Non-oil and gas revenues were also down, falling by 4% over the first eight months of the year and 14% for August alone as Russia found itself shut out of key European export markets.
Backfoot
With Russia's armed forces are on the backfoot in Ukraine as Kyiv's forces retook vast swathes of its northeast territory in recent days, Russian Prime Minister Mikhail Mishustin announced the government would give an extra RUB 100 billion of support to sectors including LNG, chemicals, aviation, and shipping.
That extra spending comes as the EU is set to implement a series of controls that will prohibit the import of Russian crude from December in most cases, with a ban on product imports set to follow from February 2023.
However, a plan to cap Russian energy export prices is yet to get off the ground as the US and Europe look to convince major consumers China, India, and Turkey to join its scheme.
