Russia’s Oil Revenue Increases 50% This Year Despite Boycott, According to IEA and Bloomberg

Russia’s oil revenues have surged by 50% this year, despite ongoing trade restrictions following its invasion of Ukraine, according to the International Energy Agency (IEA). The agency reported that Moscow earned approximately $20 billion monthly in 2022 from combined sales of oil and refined products, totaling about 8 million barrels a day.

Russian oil shipments have persisted, even as the European Union moves closer to implementing an import ban and major international oil companies, including Shell and TotalEnergies, commit to halting purchases. In contrast, Asian nations, particularly China and India, continue to purchase cargoes that are no longer being sought after in Europe.

The IEA, which provides guidance to major economies, maintained its global market outlook in its recent report. It highlighted a tightening of global fuel markets and potential strains in the coming months, particularly as demand from China is expected to recover following recent COVID-19 lockdowns. The agency also pointed out that the reduction in the flow of Russian refined products like diesel, fuel oil, and naphtha has intensified existing tightness in global markets, with stockpiles diminishing for seven straight quarters. As a result, reserves of middle distillates have reached their lowest levels since 2008.

Despite the challenges, Moscow is experiencing a substantial financial boon compared to the early months of 2021. Even with the EU publicly denouncing Russia’s actions, total oil export revenues have risen by 50% this year. In April, the EU accounted for 43% of Russia’s oil exports, remaining its largest market.

Nevertheless, there are emerging indicators of strain within Russia’s oil sector. Supplies dropped by 1 million barrels a day last month, with estimates suggesting that losses could triple in the latter half of the year. Upcoming EU sanctions against Russian state-linked enterprises, including the major producer Rosneft, are set to take effect, leading the bloc toward a full ban on Russian oil supplies.

The IEA cautioned that if these embargoes are enacted, they would hasten the ongoing reorientation of trade flows and compel Russian oil companies to close more wells.