Russia Budget Gap Spikes Despite Oil Windfall Driven by Iran War

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessRussia Budget Gap Spikes Despite Oil Windfall Driven by Iran WarRussia’s budget gap sharply widened despite a windfall in energy revenue driven by the tensions around the Strait of Hormuz, as the Kremlin continues to ramp up spending on its war in Ukraine.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.m0l9qd0ebbgmpn0stmvrqx6c_media_dl_1.png Finance Ministry(Bloomberg) — Russia’s budget gap sharply widened despite a windfall in energy revenue driven by the tensions around the Strait of Hormuz, as the Kremlin continues to ramp up spending on its war in Ukraine.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe federal budget posted a deficit of 724 billion rubles ($8.8 billion) in July, following a surplus a month earlier, according to Bloomberg calculations based on Finance Ministry data. That brought the cumulative budget deficit for the first seven months of the year to 6.5 trillion rubles, or 2.8% of gross domestic product, the ministry said Tuesday.The deterioration was driven by continued growth in spending. The ministry said the government continued to make advance payments under state contracts, a practice that’s typically concentrated in the first months of the budget before tailing off as the year unfolds.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againBudget spending rose 6% from a year earlier in July, after increasing 13% the previous month, according to Bloomberg calculations. Total outlays reached 28.6 trillion rubles in the first seven months of the year, with government procurement spending surging by 39% to 8.4 trillion rubles. That exceeds 80% of the full-year plan, Finance Ministry data show.Russia is stepping up spending on the war with Ukraine that’s in its fifth year, even as the economy has slowed sharply under the pressure of high interest rates aimed at curbing inflation.While Kyiv has increased the scale and range of drone strikes deep inside Russia targeting industrial and other facilities, the Kremlin has escalated its air attacks on Ukrainian infrastructure. Earlier, Russian lawmakers approved amendments allowing the government to increase spending without revising the fiscal law.The budget is traditionally revised in the second half of the year, and Finance Minister Anton Siluanov has already said the annual deficit target of 1.6% of gross domestic product will be raised despite the oil windfall linked to the US and Israeli war with Iran.At the same time, Russia’s total budget revenue rose 28% from a year earlier in July, according to Bloomberg calculations, supported by gains in both oil-and-gas and non-energy revenue.Total budget income from the oil and gas industry reached 934 billion rubles in July, according to the ministry. Tax revenue from oil alone jumped to a 15-month high, helped by higher crude prices following the Iran war and lower state payments to the country’s refiners, according to Bloomberg calculations.While prices for Urals, Russia’s key export blend, have declined amid on-and-off talks between the US and Iran to resolve the conflict, they remain above the average level assumed in this year’s budget.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.