An analyst with the German Science and Politics Foundation is projecting that Russia will see the highest gas profits in history for 2022 despite sanctions from the U.S. and Western powers.
“Almost half of the Russian budget is based on transactions with oil and gas. The state earns enormously from production taxes and export duties,” said Janis Kluge
“It receives the income in rubles, and the amount is determined by two factors: firstly, by energy prices on the world market and, secondly, by the exchange rate of the ruble,” Kluge added.
Kluge believes that the sanctions are backfiring and actually causing Russia to make additional profits considering the West cannot afford to deny their energy exports.
“The gas price on the spot markets has quintupled within the past year. That means Gazprom will have record revenues,” he said.
“Russia planned the national budget with a dollar-ruble exchange rate of 72, but now the ruble is around 85, much weaker, but with a view to energy exports this is an advantage. If we multiply the oil price by the ruble exchange rate, it shows that Moscow expected revenues of around 4,500 rubles per barrel of oil, but is getting much more, around 7,000 rubles,” Kluge added.