International- Russia's Finance Minister admitted that discounts on its oil and gas sales are hitting its revenues.
- He blamed "all these discounts" for causing a 50% slump in energy revenues in 1Q 2023, per the FT.
Russia has admitted that discounts on its oil and gas sales are hitting its energy revenues — a signal that Western sanctions over its invasion of Ukraine are effective.
"Russia's non-energy revenues are on track for growth as planned, with the potential for a small surplus by year-end, but there is a problem with energy revenues," Russia's Finance Minister said in a public video conference with President Vladimir Putin on Wednesday, the Financial Times reported. The FT did not state whether it had translated the comments.
Siluanov blamed "all these discounts" for causing a 50% slump in energy revenues in the first quarter of 2023, per the FT.
Since it invaded Ukraine, Russia has been hit with sweeping sanctions and boycotts which hit its key energy trade.
In particular, a G7-led coalition has imposed a $60 per barrel price cap on seaborne Russian crude, which weighs heavy on the country's energy coffers.
Russia's energy revenues between January and April stood at 2.2 trillion rubles, or $27 billion — half the previous year's revenues, the FT reported, citing data Russian finance ministry data.
Despite the trade restrictions, Russias's April crude oil exports hit 8.3 million barrels a day — the highest since the country's invasion of Ukraine, the International Energy Agency, or IEA, said in a market report released on Wednesday. Russia exported an average of 7.7 million barrels of crude oil each day in 2022.
"Russia seems to have few problems finding willing buyers for its crude and oil products," said the IEA in its report.
Willing buyers of Russian oil include China and India, which now account for about 90% of Russian oil purchases, commodities analytics firm Kpler said in April. Russia has also taken active steps to skirt Western sanctions, including switching the use of the Chinese yuan for payments, and operating a fleet of "ghost ships" with no tracking signals.
Even so, buyers for Russian oil — including countries mired in economic difficulties — like Pakistan and Sri Lanka are often looking for steep discounts. India and Chinese oil buyers, too, demand huge discounts for their Russian oil purchases.
Russia's flagship Urals crude is trading at around a $20 per barrel discount to benchmark US and Brent crude oil currently. The discount hit Russia's revenues from oil exports, which reached $1.7 billion in April — a 27% decline from a year ago, per the IEA.
Still, Russian President Putin called the country's market situation "stable" on Wednesday.
Russia's finance ministry did not immediately respond to Insider's request for comment.