A higher global oil price will help Russia pay for its war

livemint.com:

record volumes in recent months, despite Western embargoes, dwindling domestic production and the risks of navigating the Black Sea, Russia’s crude shipments fell to 3m barrels a day (b/d) in August, some 800,000 lower than the April-May average and below pre-war levels. They are likely to remain sub-par. On September 5th Russia said it would extend a “voluntary" 300,000 b/d cut first announced for August to the end of 2023 (the baseline for this reduction is unclear).

Sagging exports deprive the Kremlin of treasure just when it wants to replenish its military arsenal. In August federal-tax revenues from crude sales dropped to just $8bn, down from $10bn in July and $13bn in August last year, according to estimates by Viktor Kurilov of Rystad Energy, a consultancy (see chart). The rouble, which was for a long time another symbol of Russian resilience, has crashed to near 100 to the dollar, its cheapest since the invasion.

Both slumps have injected urgency into Russia’s efforts to earn more money from every drop of crude it pumps out. Three types of tactics feature in its new playbook. The first—chasing higher prices for the fewer barrels it sells—has faced difficulties.

Between January and August, the price of Urals, Russia’s main grade of crude, averaged $59 a barrel, down from $83 in the first eight months of last year. In large part this was because of a lower global oil price, which fell from $104 to $81 over the period. But Western embargoes, which make it easier for other buyers, such as China and India, to negotiate probably played a part, too.