**Russia’s Oil Revenues Drop by 17% in March**
Russia’s oil and gas revenue fell sharply in March, dropping by 17% compared to the same month last year. The decline was caused by forced discounts on crude oil and a stronger ruble, which hit budget inflows.
According to data from Russia’s Finance Ministry, the government lost around $2.7 billion in tax income compared to March 2024. Oil and gas revenues account for about one-third of the country’s total state income. This decline is likely to affect the Kremlin‘s ability to finance its war against Ukraine.
**Energy Revenues Crucial for Russia**
Despite Western sanctions and a price cap on oil exports, energy revenues remain a key source of financing for Russia’s war efforts. The country’s raw material rents have dropped by nearly 20% in two consecutive months, with total oil and gas tax revenues falling by 10% compared to the same period last year.
**US Sanctions Bite**
The decline follows tougher US sanctions imposed on Russian energy firms, oil tankers, and insurers involved in oil logistics. These sanctions have made it difficult for Russia to sell its crude oil internationally. China, one of Russia’s largest oil buyers, temporarily halted purchases of Russian ESPO crude due to logistical and financial complications.
**Russian Oil Traders Offer Discounts**
To attract buyers, Russian oil traders have been forced to offer significant discounts on their crude oil. This move has not yet yielded the desired results, as buyers remain hesitant due to concerns over US sanctions.
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