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IEA: Russian revenues from oil exports drop due to sanctions, global market forces

by Nate Ostiller and The Kyiv Independent news desk November 14, 2023 4:09 PM 2 min read
A view from Russian oil company Tatneft in Tatarstan, Russia, on June 4, 2023. (Alexander Manzyuk/Anadolu Agency via Getty Images)
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Russian revenues from oil exports in October dropped by almost 2.5% from the previous month in part due to Western sanctions against those violating the $60 per barrel price cap, the International Energy Agency (IEA) reported on Nov. 14.

Russia received an estimated $18.34 billion in revenue from crude oil and petroleum-product exports in October, down from $18.8 billion in September.

Although Russian oil was still largely trading above the price cap, at around $80.66 per barrel, Western sanctions against those found violating it also have increased costs for Russia's export of oil, subsequently thinning the profit margin.

Global oil prices also slipped across the board, contributing to the decline in the value of Russian oil.

Freight costs on oil shipped from the Baltic to the west coast of India had risen by almost 35% in October, the report said, surpassing $10 per barrel.

A report by the Financial Times earlier on Nov. 14 said that the price cap imposed by the U.S. and its allies was almost completely ineffective, according to unnamed Western officials.

However, sources also said that selling oil without insurance or Western shipping costs Russian oil traders considerably more, which is compounded by longer journeys and other factors associated with sanctions evasion.

Russia's revenue from oil exports has increased monthly since earlier in 2023, apart from October. Russia's oil revenue in October was still almost $5.75 billion higher than in January 2023, shortly after the price cap was introduced in December 2022.

The existing sanctions against Russia simultaneously do not go far enough and are under-enforced, the European Parliament wrote in a resolution on Nov. 9.

One of the key recommendations about how to strengthen sanctions was to close the European market for Russian fossil fuels completely.

The resolution noted that as of August 2023, the EU is still sending Russia 2 billion euros ($2.16 billion) per month for fossil fuels.

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