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Russia Energy Revenue Drops to 14-Month Low on Sanctions Fallout

  • Kremlin cut gas flows to Europe in response to sanctions
  • Russia has been forced to sell oil at steep discount in Asia

Russia’s energy revenues shrank in August to the lowest in more than a year as Western sanctions over Ukraine prompted the Kremlin to sell discounted oil and squeeze gas flows to Europe.

The refusal to buy Russian oil by some traditional customers in Europe means Moscow has been forced to sell oil at a steep discount in Asian markets, depriving it of the full benefit of higher prices. While August saw record-high spot gas prices in Europe, gas levies, which take up a smaller share in the budget, couldn’t fully offset lower oil revenues. State-run Gazprom PJSC has significantly cut gas exports to Europe this summer, blaming sanctions for capped flows.