Moscow — The revenues of Russia’s largest oil and natural gas producers dropped by 41% in the first nine months of the year, the central bank said in its financial stability review, as export volumes and prices declined.
The bank said the price of Russia’s flagship Urals oil grade fell in the same period by 26% on average, while exports via the network of oil pipeline monopoly Transneft declined by 8% compared with the first nine months of last year.
The Russian economy has faced severe headwinds from Western sanctions over the conflict in Ukraine, but has dealt with the pressure better than either Moscow or the West first expected. Russia’s finance ministry now expects a budget deficit this year of around 1% of gross domestic product (GDP), down from 2% previously.
Sources have told Reuters that trading activity with India, now Russia’s biggest buyer of seaborne oil, nearly fell apart in July because India wanted to pay in rupees and the Russian central bank told exporters it would not accept the currency.
On Wednesday, Igor Sechin, head of Russian energy giant Rosneft criticized the central bank for what he called a failure to set up a trans-border payments mechanism.
In Thursday’s review, the bank said that the share of Chinese yuan in payments for all of Russia’s exports increased to 35% in September from 13% in January, while the rouble share remained “significant”, at 39% in September.
The bank said changes to destinations, trade flows and settlement systems have meant that it is taking longer to receive payments for crude oil and oil products.
It said that the domestic FX market experienced a surge in foreign currency liquidity in August as the rouble tumbled past 100 to the dollar, but the market was generally thinner in the third quarter and liquidity fell.
Reporting by Elena Fabrichnaya and Vladimir Soldatkin; Editing by Mark Trevelyan – Reuters
