Russia Spends Billions on Refineries, Loses Gains From Oil Surge

Russia’s oil and gas revenues surged in April, but heavy subsidies and refinery repairs linked to Ukrainian strikes are offsetting gains, analysts say. Make us preferred on Google Share Facebook X (Twitter) LinkedIn Bluesky Email Copy Copied This video grab taken from a handout footage released by Russian Emergency Ministry on January 19, 2024 shows rescuers working to extinguish a fire at the oil depot following a drone attack in Klintsy, Bryansk region, amid the ongoing Russian-Ukrainian conflict. (Photo by Handout / RUSSIAN EMERGENCY MINISTRY / AFP) Content Share Facebook X (Twitter) LinkedIn Bluesky Email Copy Copied Flip Make us preferred on Google Russia’s oil and gas revenues surged in April but were largely offset by billions in subsidies and refinery repair costs linked to Ukraine’s strikes on energy infrastructure. According to the Institute for the Study of War report published on Wednesday, May 6, Moscow is struggling to fully capitalize on rising global oil prices due to mounting domestic costs. Follow our coverage of the war on the @Kyivpost_official . Russia’s finance ministry said federal revenues from oil and gas nearly doubled month-on-month, reaching 917 billion rubles (about $12 billion) in April, up from 443 billion rubles ($6 billion) in March. Oil revenues alone accounted for 771 billion rubles (around $10 billion). At the same time, Russia sharply increased spending to support its energy sector, allocating nearly 350 billion rubles (about $4.7 billion) in subsidies to oil companies. According to Russian opposition outlet Vlast, the funds are used to keep domestic fuel prices low and to repair and modernize refineries damaged in Ukraine’s long-range strike campaign. These costs are largely offsetting additional revenues driven by higher oil prices sparked by the US/Israel-Iran, with total oil and gas income reaching about 856 billion rubles ($11.4 billion) in April – only slightly above earlier forecasts. An unnamed source in the finance ministry told Vlast that revenues are expected to grow further in May, with Finance Minister Anton Siluanov previously projecting an additional 200 billion rubles (about $2.7 billion). Other Topics of Interest Two Drones Crash in Latvia After Crossing From Russia Several drones entered Latvian airspace from Russia early Thursday, with two crashing in the eastern city of Rēzekne and triggering an emergency response. One drone struck an empty oil storage tank, while authorities continued searching for the second crash site. Airspace alerts were issued across multiple regions, though no casualties were reported and the situation was later brought under control. Ukrainian strikes limit export capacity ISW analysts noted that Ukraine’s continued strikes on Russian oil infrastructure are reducing export capacity and limiting revenue gains. Key ports, including Ust-Luga and Primorsk in Russia’s Leningrad region , are operating below capacity, preventing the Kremlin from fully benefiting from higher oil prices and partial easing of US sanctions. The report suggests that Ukraine’s campaign targeting oil facilities in Russia’s rear is likely to continue undermining Moscow’s energy revenues in the coming months. Kyiv Post is Ukraine’s first and oldest English news organization since 1995. Its international market reach of 97% outside of Ukraine makes it truly Ukraine’s Global – and most reliable – Voice.