Russia could receive $321 billion for oil and gas in 2022 - Bloomberg

Despite painful financial and economic sanctions, Russia will receive almost $321 billion from oil and gas exports in 2022, a third more than in 2021, Bloomberg . reports But this is only possible if there is no embargo on energy sales.

“The single biggest driver of Russia's current account surplus remains strong,” the Institute for International Finance (IIF) said in a report. “And it looks like a significant influx of hard currency into Russia will continue.” Analysts expect Russia's current account surplus to hit a record $240 billion in 2022. According to Goldman Sachs, the balance will be $205 billion, which could allow the Central Bank to meet private sector demand for foreign exchange and minimize the impact of sanctions on capital flows.

The combination of a sharp devaluation of the ruble and rising oil prices in dollars could bring an additional 8.5 trillion rubles (or $103 billion) into the Russian budget this year, TS Lombard analysts say. In their opinion, a “healthy balance sheet” will not save Russia from a deep recession, but will help the government maintain public spending in the absence of access to international capital markets. TS Lombard notes that the exchange rate of the ruble is effectively supported by external inflows of currency in conditions when the Central Bank's reserves are frozen.

However, according to Bloomberg, all calculations can be completely revised if an energy embargo is introduced by the EU, the UK and the US. This could cost Russia up to $300 billion in export earnings, the IIF predicts. Oil production will be reduced by more than 20%. Last year, oil and gas accounted for about half of Russian exports, or about 40% of budget revenues.

• Bloomberg notes that even without the embargo, Russian oil production and exports have already begun to fall. According to the forecasts of the International Energy Agency, the volume of oil production in April may be reduced by almost a quarter. In addition, many traditional buyers refuse purchases and new contracts. And a number of partners, such as India, are getting big discounts, the sources say . Economists polled by the agency warn of a looming deep recession and rapidly accelerating inflation in Russia.

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It is already obvious that the sanctions are for a long time, and the exclusion of Russian oil and gas from world markets will continue even without an oil embargo. Read more about this in the final newsletter .