Russia's war revenue drops by $15 million in final week of 2022

Russia's oil export revenue fell by $15 million during the last week of 2022, a sign that Western sanctions are hitting Moscow's ability to fund its war on Ukraine.

Moscow pulled in $108 million in crude-export duties in the seven days leading up to December 30, down 12 per cent from the previous period, Insider reports, citing data compiled by Bloomberg.

Seaborne oil exports fell to 2.65 million a day on a four-week average, a decline of 117,000 barrels a day from the previous period.

That comes shortly after the European Union imposed a partial embargo on Russian oil and signed on to a $60 price cap on Russian crude that both took effect on December 5.

Oil exports plunged 54 per cent the first full week the sanctions kicked in – spelling trouble for Russia, as crude oil is one of the nation's main sources of revenue.

Before the latest sanctions, Europe was one of Russia's largest oil customers and has been difficult for Russia to replace. Bloomberg reported that Moscow is left largely to lean on China, India, and Turkey, the three of which are now Russia's only major buyers.

Meanwhile, the price cap on Russian crude has also allowed customers to jockey for heftier discounts. Traders familiar with the matter said seven cargoes were sold to India below the G7 price cap, despite Russia's vow to halt business with any country that supports the mechanism.

In recent days, benchmark oil prices have slipped below $80 per barrel amid fears that an explosion of COVID infections in China will weaken demand.

But prices could rise again as Russia has threatened retaliation against the price cap by slashing 700,000 barrels a day of its own oil from the spot market.

In addition, UBS has said that Russian oil production is expected to fall by at least 1 million barrels a day due to the EU ban alone, which could cause Brent crude prices to soar past $100 a barrel.