Russia funds hit by cheaper oil and prices of Ukraine struggle

London
CNN Business
 — 

There are new signs of strain in the Russian economy as energy prices fall and nearly seven months of war in Ukraine prove increasingly costly.

Russia’s budget surplus all but disappeared over the summer, according to data published by the Russian finance ministry this week. At the end of June, the surplus stood at 1.37 trillion rubles ($23 billion); by the end of August it had fallen to just 137 billion ($2.3 billion.)

Revenues are under pressure. Oil is traditionally a bigger component of the Russian budget than natural gas, and Brent crude prices — the European benchmark — have fallen about 25% since their peak in early June.

That’s a big hit, even before an EU embargo on Russian seaborne oil imports, and a planned G7 price cap come into force in December. And while natural gas prices in Europe remain extraordinarily high, Russia’s gas…

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