Russia lost $26 billion on oil and gas exports
Russia is making less money on oil and gas exports, according to the data published today by the Federal Customs Service. In 2016, the revenues from oil and gas exports declined by 17.7% (compared to 2015) and amounted to $73.676 billion. Gazprom’s revenues from gas exports declined by 25% and amounted to $31.28 billion.
The service also noted that the oil export increased by 4.2% to 254.767 million tons. The oil export to the CIS countries amounted to 236.195 million tons against 221.603 million tons in 2015, showing an increase of 6.58%. In terms of money, the exports declined to $69.616 billion from $83.955 billion in 2016 (by 17%), TASS reports.
In addition, the Federal Customs Service said that last year, Gazprom increased its gas exports by 6.5% to 198.7 billion cubic meters. The volume of natural gas exports to the non-CIS countries amounted to 164.7 billion cubic meters in 2016, to the CIS – 34 billion cubic meters.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to Vestnik Kavkaza, noted that, despite such a significant loss of revenue, Russia’s budget for 2017 was not significantly affected. “The budget and its deficit has been based on the reduction in oil revenues. Now it is important whether there will be the same pattern in 2017. But the way things are going, oil and gas revenues to the budget will be higher, as the oil price has increased,” he said.
“2016 was the peak of the increase in prices: in the beginning of last year, oil hit a low below $20 per barrel, then gradually increased to $55 per barrel. Preserving the current prices is beneficial for Russia, the more expensive oil is, the higher revenue will be. Therefore, we can expect that the budget revenues will grow in 2017. Let me remind you that the budget-2017 has been based on the price of Russian oil of $40 per barrel, and now it is about $15 higher. Therefore, in 2017 everything will be better with revenues from the export of hydrocarbons,” Igor Yushkov expects.
The deputy director of energy policy of the Institute of Energy and Finances, Alexey Belogoriev, in turn, recalled that the reduction of export revenues from the sale of hydrocarbons has led to Russia’s budget deficit in both 2015 and 2016. “They could not offset such a decline even by increasing taxes on mining. This year, due to the fact that oil prices have increased, a significant increase in export revenues is expected, since oil exports are likely to grow,” the economist predicts.
The gas revenues will depend on the situation in the countries consumers of Russian gas. “It is likely that exports to non-CIS countries will decline slightly this year, if the heating season in Europe is not colder than in 2014-2015. In such circumstances, against the background of European prices, the demand for Russian gas will be lower, due to which revenues can either stay on the last year level, or slightly decrease,” Alexey Belogoryev warned.