Russia, a member of the BRICS coalition, experienced a notable rise in revenue within the oil and gas sector during April 2024, despite facing economic sanctions from the United States. This increase comes amidst ongoing efforts by Russia to mitigate the impact of these sanctions through various means.
One significant strategy employed by Russia has been the sale of oil at discounted prices to its trade allies, a practice initiated since 2022. Notably, Saudi Arabia engaged in purchasing oil from Russia at discounted rates and subsequently distributed it throughout Europe, facilitating a balancing act for Russia’s economy in the face of White House sanctions.
Similarly, India, another BRICS member, increased its oil purchases from Russia during this period, resulting in significant savings amounting to $7 billion due to favorable exchange rates. China has also been a consistent buyer of Russian oil, opting for cheaper prices and settling trade transactions in Chinese Yuan.
Despite the imposition of sanctions, these developments suggest that the impact on Russia’s economy has been limited, with its oil and gas revenue projected to double in April 2024 according to a recent Reuters report. This increase signifies a shift towards alternative trade mechanisms and currencies, as many developing countries opt to procure Russian oil using their local currencies instead of the US dollar.
The utilization of local currencies in oil trade transactions by developing nations is seen as a means to bolster their respective economies amidst the backdrop of sanctions. As such, the sanctions have inadvertently led to strengthening local currencies and fostering greater economic resilience in these nations.
Looking ahead, Russia’s budget projections for 2024 anticipate a substantial increase in federal revenue from oil and gas sales, reflecting a strategic response to challenges posed by weaker oil prices and sanctions-affected gas exports observed in previous years.
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