Data from the Russian Ministry of Finance issued today, Thursday, showed a decline in net financial revenues from oil and natural gas exports by about a quarter during the past year, reflecting the drop in global crude prices and the sharp decline in Russian natural gas exports through pipelines to Europe.

The ministry stated that the Russian state obtained 8.82 trillion rubles (99.3 billion dollars) through taxes on the oil and gas sector during the past year, a decrease of 24% compared to the previous year.

Bloomberg News Agency reported that petrodollar flows to Russia declined due to the drop in Russian oil prices amid falling global prices and tightening Western sanctions on the Russian energy sector in response to the Russian-Ukrainian war.

At the same time, the sharp decline in natural gas exports through pipelines, along with generous government support for the Russian oil sector, led to an intensified deterioration in revenues according to official figures.

The decline in oil and gas revenues exacerbates pressures on the Russian budget at a time when the government intends to increase military spending this year by nearly 70%, as the Russian-Ukrainian war approaches its third year.

Russian President Vladimir Putin also plans to increase social spending as part of his preparation to run in the presidential elections to win a fifth term next March.

The average price of Urals crude oil, the main Russian oil, declined by more than 17% last year to $62.99 per barrel, according to the Ministry of Finance.

Despite this, the price remained above the export price cap for Russian oil set by the Group of Seven major industrialized countries and their allies at the end of 2022, which is $60 per barrel, aimed at limiting the Russian government's revenues and thereby reducing its ability to finance the war in Ukraine.