Russia’s revenues from energy exports in 2022 are expected to amount to $ 337.5 billion, which would be a 38 percent increase compared to the previous year, the Reuters Agency reported, citing the forecasts of the local economy ministry. The reasons are growing oil exports and rising gas prices.
The Reuters agency pointed out that the surge in revenues, if it materializes, will help strengthen the Russian economy, which is struggling with the effects of Western sanctions. As added, it will provide this too Vladimir Putin resources for military spending or increasing wages and pensions at a time when the economy has slipped into recession, and inflation it lowers the standard of living of citizens.
Sanctions against Russia
According to analysts, the boom in energy income only partially compensates for the damage to the entire economy resulting from the sanctions.
– The impact of sanctions on the economy Russia it is very uneven. In some sectors it has been disastrous, such as in the car industry. The oil sector is relatively clean for the time being, said Janis Kluge from Germany’s Institute of International and Security Affairs. Apart from the automotive industry, the IT sector is also mentioned among the hardest hit sectors.
“These sectors have had the strongest ties to the West and, as a consequence, suffer the most,” Kluge added.
Russia’s energy revenues
Forecasts of the Russian Ministry of Economy assume that revenues from energy exports in 2023 will fall to USD 255.8 billion, which will still be higher than in 2021, when revenues amounted to USD 244.2 billion. The ministry did not respond to a request from the Reuters Agency for comment.
Forecasts assume that the average price of gas exports this year will more than double to USD 730 per thousand. m3, and then it will gradually decline until the end of 2025.
The Reuters agency pointed out that the flow of gas from Russia, the main gas supplier to Europe, remains at a reduced level. There is a dispute on the Germany-Russia line over a turbine for the Nord Stream 1 pipeline, which “got stuck in transit” after carrying out repair work in Canada. Moscow has reduced gas supplies through the gas pipeline leading to German up to 20 percent its bandwidth, citing technical problems. Some countries, including Poland, have been cut off from supplies for refusing to pay for the raw material in rubles.
As a result, gas prices have risen sharply, putting Europeans in jeopardy of energy rationing this winter.
PAP / Maciej Zieliński
In addition, Russia has started to gradually increase oil production after restrictions related to Western sanctions and as Asian buyers increased their purchases. Moscow has increased its production and export forecasts until the end of 2025.
Gazprom reported that gas supplies to China are also growing. However, the company did not provide details on exports to the Middle Kingdom. The Reuters agency stressed that Europe still remains a much larger market for Russian gas.
Russia’s GDP in 2022
The agency got access to the latest forecasts earlier this week. According to Reuters, the estimated results suggest that Russia’s economy is dealing with Western sanctions better than Moscow itself assumed.
At one point, the government there reported that the economy could contract by more than 12 percent, which would be the largest decline in GDP since the collapse of the Soviet Union and the ensuing crisis in the mid-1990s.
Current forecasts assume that Russia’s GDP will shrink by 4.2 percent this year.
Main photo source: EPA / YURI KOCHETKOV