Russia succeeded in recording a huge jump in its oil revenues during the month of April. Oil tax revenues doubled to reach $11.5 billion, supported by the rise in Urals crude prices and the weakness of the ruble, despite international sanctions imposed on the country due to its invasion of Ukraine.

Data from the Russian Ministry of Finance indicate that state budget revenues from oil-related taxes amounted to 1.053 trillion rubles last month, compared to 497 billion rubles in April 2023. Total oil and gas revenues also rose by 90% year-on-year to reach 1.23 trillion rubles.

This sudden increase in revenues is due to two main factors: the first is the rise in Urals crude prices; Government taxes in April were calculated based on a price of $70.34 per barrel, an increase of $48.67 over the previous year.

The second factor is the weakness of the ruble. The exchange rate for tax purposes in April was set at 91.69 rubles to the dollar, 20.5% lower than the previous year.

These numbers reveal Russia's remarkable ability to financially withstand Western sanctions, which aim to strangle its economy and force it to stop its war in Ukraine.

The Russian oil sector is the lifeline of the national economy. It constitutes a major source of budget revenues that finance massive military spending in the ongoing war in Ukraine.

Despite international efforts to reduce the flow of money to Moscow, Russia has been able to mitigate the impact of sanctions by shifting its trade to buyers from non-Western countries and using its own fleet of tankers.

Bloomberg Economics estimates that Russia will collect $126 billion in oil and gas tax revenues in 2024. According to Alex Isakov, a Bloomberg economist in Russia, “Russia will break even with its military budget if Brent crude oil exceeds $95, but its fiscal position will remain relatively sustainable.” At oil prices above $70.”

Russia's continued ability to reap huge profits from its oil exports worries the West. These numbers indicate that the current sanctions may not be enough to paralyze Moscow's economy and force it to stop its war in Ukraine.

The question of how to increase economic pressure on Russia without harming the economies of Western countries is likely to become at the top of the agenda of Western leaders in the coming period.