Russia's Oil Tax Revenue to Double in April

Russia's primary oil tax revenue is projected to double to approximately 700 billion roubles, or about $9 billion, in April, driven by a sharp surge in global oil prices following the closure of the Strait of Hormuz amid escalating conflict in the Middle East.

The increase stems from a crisis triggered by U.S. and Israeli airstrikes on Iran at the end of February, which prompted Iran to effectively shut the strait, a critical chokepoint for roughly one-fifth of the world's oil and liquefied natural gas shipments. This disruption sent Brent crude futures soaring beyond $100 per barrel, exacerbating what oil traders describe as the most severe energy shortage in recent history. Russia's mineral extraction tax on oil production, now its main revenue stream from the sector after export duties were eliminated at the start of 2024 as part of ongoing industry tax reforms, is expected to rise from 327 billion roubles in March. Calculations based on preliminary production figures and current prices indicate this marks a roughly 10 percent increase from April of the previous year.

The average price for Russia's Urals crude, the benchmark used for taxation, climbed to $77 per barrel in...