Russia’s fossil fuel export revenues fell 3% month-on-month in July to €585mn a day, as weaker crude oil and LNG sales offset a sharp rise in pipeline gas income, according to the July monthly update on Russia’s oil trade from Centre for Research on Energy and Clean Air (CREA).

The Helsinki-based think tank said seaborne crude oil revenues fell 12% to €192mn per day, with export volumes down 11%. LNG revenues declined for the fourth consecutive month, dropping 19% to €30mn per day on a 21% fall in volumes. In contrast, pipeline gas income rose 41% to €71mn per day, aided by the resumption of TurkStream flows after June maintenance and “heatwaves that raised electricity consumption and gas-fired power generation,” CREA said.

CREA stressed that G7+ countries still played a central role in transporting Russian oil, handling 55% of seaborne exports in July, up from 36% in January. Likewise, Greek tankers make up fully a fifth of the so-called shadow fleet, legally able to carry Russian oil after the price for the Urals blend, named in the oil price cap sanctions, fell below $60 a barrel this summer.

The EU hopes to redress this lacuna with the eighteenth sanctions package passed in July that introduces a floating rate oil price sanctions cap of 15% below market rates for the Urals blend, Russia’s main export product – currently at $47 per barrel, whereas Urals was trading at $62.8 as of August 12. This week EU foreign policy chief and former Estonian Prime Minister Kaja Kallas announced that the EU had already started work on the next nineteenth sanctions package to tighten the noose further.

The think tank argued that stricter enforcement of sanctions could make a substantial impact. “A lower price cap of $30 per barrel would have slashed Russia’s oil export revenue by 40% (€150bn) from the start of the EU sanctions in December 2022 until the end of June 2025,” it said, adding that “in July alone, a $30 price cap would have cut revenues by 36% (€3.84bn).”

The lower prices of oil in the market this year has already hurt the federal budget revenues and is likely to lead to a high deficit this year, albeit still manageable.

Russia’s oil and gas revenues fell 27% year-on-year in July to RUB787bn, a slight improvement from the 33.7% y/y drop seen in June, according to Bloomberg analysis of Finance Ministry data.

bne IntelliNews already covered in detail how June's budget deficit has widened sharply as military spending and oil revenues diverge. 

Crude oil export revenues alone plunged 33% y/y in July, compared to a 40% decline the previous month, Bloomberg estimated. The figures came in better than Reuters’ earlier forecast of a record 37% fall for July, indicating that the slump in energy income may have stabilised, albeit due to a low base.

Notably, on a month-to-month basis, oil revenue rose by almost 71% in July, according to Bloomberg calculations. “The increase reflects the fact that one of Russia’s main oil taxes — a profit-based levy — is paid four times a year in March, April, July and October,” Bloomberg wrote.

Bloomberg reminds that oil and gas proceeds account for roughly a third of Russia’s budget, already burdened by “massive spending” on Russia’s full-scale military invasion of Ukraine.

Since sanctions were introduced in 2022, full enforcement of the current cap would have reduced revenues by 11%, and by 6% in July alone, CREA estimated.

The institute also highlighted environmental and financial risks from Russia’s continued reliance on ageing “shadow” tankers. “Older ‘shadow’ tankers transporting Russian oil… raise environmental and financial concerns due to their age, questionable maintenance records, and insurance coverage,” it warned, noting that the cost of cleaning up a spill from such a vessel could exceed €1bn for coastal taxpayers.

China remained the largest buyer of Russian fossil fuels in July, accounting for 42% (€6.2bn) of top-five importer revenues, followed by India (€3.5bn) and Türkiye (€3.1bn). The EU ranked fourth, with €1.3bn in imports — 70% of which were LNG and pipeline gas, which remain unsanctioned.

CREA said that the increasing use of G7+ tankers in Russian oil trade underscored the need for “thorough enforcement” of maritime restrictions to align transport practices with sanction goals.