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Russian gas revenues slump 40% m/m in June amid Gazprom supply cuts

Russian gas revenues slump 40% m/m in June amid Gazprom supply cuts
Russian gas revenues slump 40% m/m in June amid Gazprom supply cuts

Russia saw its revenues from natural gas exports slump 40% month on month in June, highlighting the self-inflicting damage that Gazprom’s recent cuts in gas supply to Europe are doing to Moscow’s coffers.

The country’s gas export revenues in June amounted to RUB633bn ($10.7bn), the Moscow-based Vedomosti newspaper reported this week, citing federal tax data. In May, those revenues amounted to more than RUB1 trillion. Oil sales were also down, by 10%, to RUB605bn in June.

Much of the international attention on Russian cuts to gas supply has centred on the impact this is having on European energy markets, which is certainly substantial, with spot prices having spiked at $2,200 per 1,000 cubic metres on July 27 for the first time in history. But Gazprom’s actions have also caused significant harm to the Russian budget.

Exactly how much harm it has caused is impossible to say, as the government has not been disclosing budget details since the invasion of Ukraine began. Vedomosti also reached out to Gazprom, Rosneft, Lukoil, Gazprom Neft and Surgutneftegaz for details on oil and gas exports, but received no response.

 In dollar terms, gas export revenues fell to $11.1bn in June from $16.2bn in the previous month. Vedomosti notes that despite the month on month slump, Russia’s revenues from gas sales abroad were still three times higher in June than in the same month last year, highlighting the impact that soaring European gas prices are having, despite the cut in volumes.

In volume terms, Russia exported 10.9bn cubic metres in June, down from 12 bcm in the previous month. In contrast, it shipped 15.7 bcm in May and in June in 2021.

Russia began cutting off gas customers in late April after some refused to comply with a Kremlin decree requiring payment in rubles. Since June, it has also been curtailing supply via the Nord Stream pipeline, citing Siemens’ delay in returning a delay, even though the company could have made up for these constraints by sending more gas via Ukraine and other routes. The pipeline is currently operating at only a fifth of its 55 bcm per year capacity.