Russia benefits from oil spike

Russia’s oil windfall has risen with the latest crude spike, giving Moscow more cash just as sanctions and war costs keep piling up. (reuters.com) Reuters calculated on April 9 that Russia’s biggest single oil tax would double to about $9 billion in April after the Middle East crisis pushed prices sharply higher. The same report said Russia’s Urals crude averaged about $77 a barrel in March, up 73% from February and above the $59 level built into Russia’s 2026 budget. (reuters.com) The International Energy Agency said on April 14 that Russia’s oil and fuel export revenues nearly doubled in March to about $19 billion, while export volumes rose to 7.1 million barrels a day from 6.78 million in February. The agency tied the broader price surge to disruptions around the Strait of Hormuz, which normally carries around 20 million barrels a day of crude and products. (iea.org, iea.org) Russia entered that rebound after a weak first quarter. The Finance Ministry said federal budget oil-and-gas revenues fell 45.4% year over year in January through March to 1.443 trillion rubles, while the budget deficit widened to about 4.58 trillion rubles, or 1.9% of gross domestic product. (minfin.gov.ru, interfax.com, tass.com) Higher crude prices can ease that pressure fast because Russia taxes production and exports in rubles linked to oil prices and the ruble exchange rate. Reuters said the projected April mineral extraction tax haul would be around 700 billion rubles, up from 327 billion rubles in March. (reuters.com) That matters for the war in Ukraine because oil and gas still anchor a large share of Kremlin revenues even after Europe cut purchases and the Group of Seven imposed a $60 price cap on seaborne Russian crude in December 2022. S&P Global said Russian grades shipped above the cap have increasingly moved outside Western shipping and insurance networks. (spglobal.com, reuters.com) The price spike does not erase Russia’s vulnerabilities. Reuters reported on April 21 that Ukrainian drone strikes on Russian ports and refineries, plus a halt on the last Russian oil pipeline route to Europe, forced Moscow to cut oil output in April in what sources called the sharpest monthly drop since the Covid-19 period. (reuters.com) The International Monetary Fund also raised its 2026 Russia growth forecast to 1.1% from 0.8% on April 14, citing higher oil and commodity prices from the Middle East crisis. In the same week, President Vladimir Putin publicly scolded officials after the economy contracted 1.8% in the first two months of 2026. (reuters.com, reuters.com) The bigger picture is that a global supply shock can still hand Russia a revenue boost even when sanctions stay in place and some export infrastructure is under attack. As long as crude stays elevated, each extra barrel sold gives the Kremlin more room to finance spending at home and sustain the war abroad. (iea.org, reuters.com)