Russia’s Oil Sales Revenues fell by $700 million last month: IEA

• According to the IEA in November, Russia’s oil exports revenue fell by $700 millions. 
• It said that deep discounts and falling crude oil prices led to a drop in revenue despite an increase in exports. 
• The agency stated that a G7 price cap on Russian crude oil will reduce output and push global prices up next year. 

According to the International Energy Agency (IEA), Russia’s oil sales revenue dropped last month, even though its crude exports rose. 

Moscow’s export revenues fell by $700m in November due to deep discounts and lower crude prices around the world. They now stand at $15.8 billion. the IEA said in its monthly report. Despite an increase in daily shipping of 270,000 barrels to 8.1 million barrels, which is the highest level since April, this is still a significant improvement. 

Russia has been selling its oil at steep discounts in Asia since its invasion and occupation of Ukraine. It is looking for other buyers to replace its European market. China and India now account for around two-thirds all Russian seaborne crude oil exports. 

The two Asian countries are major customers demanding even bigger discountsThis is putting a dent in the Kremlin’s war chest. Bloomberg estimates that Russia loses approximately $4 billion per month in energy revenues. 

This is in addition the recent drop in global oil prices and fears of a recession. China’s strict zero-Covid rules have also had an impact on energy markets, reducing demand for crude oil from the second-largest economy in the world. 

Brent crudeFutures, the international benchmark for oil prices, have fallen more that 8% since October, even though OPEC+ made a decision to cut output in an effort to support prices. This drop comes after months and high prices that soared past $100 per barrel in March. Brent crude oil traded at $82.04 as of Thursday’s last check. 

“While lower oil prices provide relief to consumers who are facing surging inflation, it remains to be seen what the full impact of embargoes against Russian crude and product supplies will be,” said the IEA.

G7 countries agree to a price cap of $60-per-barrelIn an attempt to reduce the country’s revenue, but still allow for the flow of its oil cargoes all over the world, Russia imposed a ban on Russian crude oil earlier in December. 

According to Reuters, the cap will mean that Russian output will drop by 1.4 million barrels per hour. This could reduce global supply and increase prices. 

“As we move through winter months and towards a tighter crude oil balance in 2Q23,” the IEA stated.