“It’s not just about exports”
Oil and gas revenues of the Russian treasury increased in April by 90% in annual terms to 1.23 trillion rubles, writes Bloomberg. The agency explains this by increased prices for Urals oil and the weakening of the ruble. However, in addition to short-term, market factors, there are circumstances of a global long-term nature. First of all, this is the acceleration of the growth rate of the Russian economy and the completely successful reorientation of exports to the markets of China and India.
The price of a barrel of Urals increased by almost 50% — from $47.85 in March 2023 to $70.34 in March 2024. At the same time, in rubles, due to the depreciation of the national currency, oil prices during this period rose even more noticeably — by 77%. In April, as in March, the high level of raw material receipts was supported by the calendar factor: the budget was replenished with additional income tax collections — AIT, which oil workers pay only four times a year. Meanwhile, behind all these technical aspects that are difficult for a non-specialist to understand, there lie much more significant phenomena.
“There is a widespread opinion that if you trade energy resources, then you have a backward, worthless economy,” says financial analyst, Candidate of Economic Sciences Mikhail Belyaev. – I take a different position: it was this structural factor that determined Russia’s stability in the face of unprecedented Western sanctions. Everyone needs raw materials, which is why they managed to transfer them from European markets to eastern markets, which are also growing and expanding. Twenty years ago, in a (hypothetical) situation of a complete severance of trade ties with the EU and the USA, we and our raw materials industry would have been in a puddle: our products would have remained unclaimed, since neither China nor India had a highly developed economy at that time. And today, the same India, having a powerful oil refining base, buys oil from us not so much for domestic consumption, but to saturate its refineries and subsequent resale to Europe.”
In addition, Belyaev summarizes, Russian mining companies have advanced technologies. They use both artificial intelligence and the latest materials. The combination of high-tech production and the demand for the product in different markets (not only external, but also domestic, for example, for the needs of the military-industrial complex, manufacturing companies) results in the figures cited by Bloomberg. If you increase output within the country, your contributions to the budget also increase. Income is not only from exports.