Russia raises oil export duty again on back of surging prices

Russia will again raise an oil-export levy the country’s producers pay, bringing more money into its coffers as surging prices compensate for smaller shipments.

The government will increase the duty to $23.90 per ton in October, the highest level this year, following a rally in the price of Russia’s key export blend Urals, the Finance Ministry said Friday. That’s up 12% from September and equates to about $3.26 a barrel.

Oil proceeds are a key source of revenue for Russia’s budget, which has been strained by Western sanctions on the economy and the expense of the Kremlin’s invasion of Ukraine. While export duties on crude and products account for just a fraction of the nation’s total petroleum taxes, the October increase will help to make up for lower exports. 

Russia will extend its crude export cuts of 300,000 barrels a day through year-end, it said earlier this month. That — along with output curbs from fellow OPEC+ leader Saudi Arabia — has helped tighten the global oil market and push up the price of Russian crude.

The Brent benchmark has surged about 30% since mid-June to almost $95 a barrel, with analysts increasingly forecasting that oil will reach $100.

Russian Urals averaged $77.03 a barrel over the monitoring period from Aug. 15 to Sept. 14, according to the Finance Ministry. Its discount to North Sea Dated Brent narrowed to $11.58 in the period.

If crude strength persists, September will be the third straight month when Urals trades above a $60-a-barrel price cap that was introduced by the Group-of-Seven countries to limit petrodollar inflows into Russia.