Sunday, February 5, 2023
Finance Market News
Advertisement
  • Home
  • Finance
  • Trade News
    • All
    • Business
    • Cryptocurrency
    • Dow Jones

    Bitcoin spikes above $24K as Fed chair Powell talks of ‘disinflation’

    ING 4Q Net Profit, Final Dividend Beats Expectations

    Last year’s stock-market volatility has carried over into January. Here’s what

    Boeing’s 747, the original jumbo jet, prepares for final send-off

    Boeing’s 747, the original jumbo jet, prepares for final send-off

    Korea FSS Issues Guidelines on Employee Personal Trading

    Korea FSS Issues Guidelines on Employee Personal Trading

    Trending: LG Energy Quarterly Profit Soars

    Chevron, Tesla, Seagate Technology, United Rentals and more

    Chevron, Tesla, Seagate Technology, United Rentals and more

    Asia-Pacific markets, trade data, Bank of Japan

    Asia-Pacific markets, trade data, Bank of Japan

    U.S. Treasurys at ‘critical point’: Stocks, bonds correlation shifts as

    • Dow Jones
    • Cryptocurrency
  • Investing
    • All
    • Automobiles
    • Diamonds
    • Gold
    • Oil & Gas
    • Real Estate
    U.S. House committee to hold aviation safety hearing – Reuters

    Natural Gas Price Forecast – Natural Gas Markets Continue to See Negativity – FX

    U.S. House committee to hold aviation safety hearing – Reuters

    Gold Price Today (February 4): Yellow metal dips over Rs 2,500 from record high

    U.S. House committee to hold aviation safety hearing – Reuters

    Gold price drops nearly $50 as the U.S. service sector grows in January, the

    U.S. House committee to hold aviation safety hearing – Reuters

    3 Skin Care Habits An Esthetician Wishes She Knew In Her 20s | mindbodygreen –

    U.S. House committee to hold aviation safety hearing – Reuters

    U.S. House committee to hold aviation safety hearing – Reuters

    Here’s Why Roku Stock Jumped 41% Last Month

    Here’s Why Roku Stock Jumped 41% Last Month

    Wagner mercenaries sustain losses in fight for Central African Republic gold |

    Intel slashes employee, exec pay amid PC market downturn

    Intel slashes employee, exec pay amid PC market downturn

    Column: Bullish oil investors look beyond China’s COVID wave

    Gold set for third monthly rise on softer dollar, Fed slowdown bets

    • Diamonds
    • Gold
    • Oil & Gas
    • Automobiles
  • Forex Analytics
    • All
    • Central Bank Views
    • Market Overviews
    Executive Moves of the Week

    Executive Moves of the Week

    Forex and Cryptocurrency Forecast: Five Days of Storms and Tsunamis

    Forex and Cryptocurrency Forecast: Five Days of Storms and Tsunamis

    FLX Networks partners with Broadridge as a data and analytics provider LeapRate

    FLX Networks partners with Broadridge as a data and analytics provider LeapRate

    Decentralized forex will reduce cost by as much as 80%: Report

    Decentralized forex will reduce cost by as much as 80%: Report

    USD/JPY at 126 Support with Wedge Formation

    USD/JPY at 126 Support with Wedge Formation

    Biden nominates longtime USDA adviser to agricultural trade post

    Market Makers Survey Reveals Widespread Adoption of AI in Hedge Fund Industry

    Japanese Yen Price Action Setups: USD/JPY, EUR/JPY, GBP/JPY

    Japanese Yen Price Action Setups: USD/JPY, EUR/JPY, GBP/JPY

    FX Back Office and Centroid Solutions team up in the interest of international

    FX Back Office and Centroid Solutions team up in the interest of international

    Week Ahead: BOJ, More Inflation Data, and Earnings

    Week Ahead: BOJ, More Inflation Data, and Earnings

    • Central Bank Views
    • Market Overviews
  • Politics
  • Finance
  • Markets
  • Retail
  • Personal Finance
  • Real Estate
Finance Market News
No Result
View All Result
Home Investing Oil & Gas

Sanctions-Proof Yuan to Putin’s Rescue After Oil Cap Hits Budget

January 24, 2023
in Oil & Gas
Reading Time: 3 min
Sanctions-Proof Yuan to Putin’s Rescue After Oil Cap Hits Budget
Share on FacebookShare on Twitter


(Bloomberg) — The price cap on Russian crude oil exports is starving President Vladimir Putin’s budget of income, though it likely won’t force him to ratchet down spending for years thanks to a $45 billion buffer of yuan reserves.

Most Read from Bloomberg

Revenue plunged when the Group of Seven’s $60 per barrel limit came into effect last month. It combined with Putin’s spending increases since the invasion of Ukraine to contribute to a record deficit in December, with Russia’s flagship blend Urals trading just around $50, or nearly a third less than a year earlier.

Still, should it average the same price, Russia has enough to cover its shortfall for the next three years, according to Bloomberg Economics. Citigroup Inc. sees the stash depleted in 2 1/2 years with Urals at that level.

If Urals trades in the range of $40 to $50, revenue will fall as much as 2.5 trillion rubles ($36 billion) short of what the government budgeted, meaning monthly yuan sales would have to be more than triple the amount expected in January, according to Natalia Lavrova of BCS Financial Group.

The jolt to the budget turned the spotlight on a fiscal mechanism revived this month and involving sales of yuan from Russia’s wealth fund when revenues are below the target set by the government.

The yuan is the only currency remaining in Russian reserves that can be used for interventions in the foreign-exchange market following the seizure of about $300 billion in holdings that included dollars and euros after the war began almost a year ago.

The calculus of how long the 310 billion yuan ($45 billion) in reserves might last provides a measure of Russia’s fiscal distress and allows its economic stamina to be gauged as the war drags on. And although the squeeze has become acute, Russia won’t burn through its stock of yuan assets this year unless Urals halves and averages $25, according to Bloomberg Economics.

Citigroup estimates it would only take an average price of $35 to deplete the available yuan resources already in 2023.

Other scenarios for Urals suggest Russia should tolerate pressure on the budget for much longer without reducing expenditure. An oil price above $60 would even allow the government to start adding to its yuan reserves.

What Bloomberg Economics Says…

“Russia might not want to run yuan reserves all the way down to zero, which could mean that FX sales will slow as reserves dip. In any case, these FX sales might buy authorities enough time to adjust to permanently lower energy-export revenues.”

—Alexander Isakov, Russia economist. For more, click here

Putin has said Russia is putting “no limitations” on military spending for the war in Ukraine, with budget expenditure surging by about a third in 2022 from what it planned before the invasion of Ukraine. Outlays are on track to remain around the same level in the coming year even as revenues come under pressure.

Russia’s budget hasn’t been so reliant on high oil prices for about a decade. It needed Urals to average $104 to balance the books last year and the break-even will decline to $90 in 2023 only if the government avoids spending increases, Bloomberg Economics estimates.

Though Russia faces narrowing options in shoring up public finances, oil prices and the drawdown of the wealth fund won’t alone determine Putin’s choices.

Recent proposals include higher dividends from state companies and a “one-time payment” by fertilizer and coal producers, alongside a plan to trim some non-defense spending. A windfall tax paid by Gazprom PJSC already helped sustain a budget surplus late last year.

For the full year 2022, the fiscal gap reached about 3.3 trillion rubles, or 2.3% of gross domestic product. This year’s deficit is forecast at 2%, based on an oil price of $70 per barrel.

Russia is also considering changes to the way it calculates taxes on oil to limit the plunge in budget revenue. The local bond market is another recourse available to the Finance Ministry, which staged record debt sales late last year to use up less of its wealth fund.

Other factors at play include a push by some European Union member states for a price cap even lower than the current $60. The US has so far argued in favor of keeping the threshold unchanged ahead of additional curbs on the trade in refined Russian fuel.

And while the price cap triggered record discounts on Russia’s oil-export blend — pushing it to trade at roughly half the price of international…



Read More: Sanctions-Proof Yuan to Putin’s Rescue After Oil Cap Hits Budget

Tags: BudgetcaphitsoilPutinsRescueSanctionsProofYuan
Previous Post

On the entanglement of race, religion, and politics in America : News Center

Next Post

How to cure a holiday debt hangover By Reuters

Related Posts

Inside the Fight to Save the Peruvian Amazon From Big Oil – Rolling Stone

Inside the Fight to Save the Peruvian Amazon From Big Oil – Rolling Stone

by Finance Market News
January 31, 2023
0

I was trying to do something I never do: take a two-day vacation.  I had been in Peru for...

How a Single Oil Spill Can Disrupt the Global Energy Supply

How a Single Oil Spill Can Disrupt the Global Energy Supply

by Finance Market News
January 28, 2023
0

Close-up of the desalination and liquid natural gas export infrastructures in Qatar. Credit: Thomas Anselain, Essam Heggy, Thomas Dobbelaere...

Oil market braces for fresh turmoil as EU prepares to cut off Russian diesel

Oil market braces for fresh turmoil as EU prepares to cut off Russian diesel

by Finance Market News
January 23, 2023
0

The EU is on the brink of effectively severing ties with its biggest external diesel supplier when sanctions on...

Indian shares up on crude oil windfall tax cut; FPI selling caps gains

Indian shares up on crude oil windfall tax cut; FPI selling caps gains

by Finance Market News
January 17, 2023
0

BENGALURU, Jan 17 (Reuters) - Indian shares were higher in early trade on Tuesday, lifted by oil and gas...

Oil dips, but hovers near 2023 highs on China demand optimism

Oil dips, but hovers near 2023 highs on China demand optimism

by Finance Market News
January 16, 2023
0

The Leuna refinery and chemical industrial complex, home to facilities operated by companies including TotalEnergies SE, Shell Plc, BASF...

Next Post
How to cure a holiday debt hangover By Reuters

How to cure a holiday debt hangover By Reuters

Subscribe
Login
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

Today Trend News

New TDWI Research Report Explores Drivers, Challenges, and Opportunities for

New TDWI Research Report Explores Drivers, Challenges, and Opportunities for

November 16, 2022
South Korea to stabilise foreign exchange market

South Korea to stabilise foreign exchange market

December 18, 2022

Bitcoin spikes above $24K as Fed chair Powell talks of ‘disinflation’

February 2, 2023
EUR/GBP Daily Outlook – Action Forex

EUR/GBP Daily Outlook – Action Forex

November 17, 2022
Federal Judge Puts New York’s Affordable Internet Law on Hold

Federal Judge Puts New York’s Affordable Internet Law on Hold

December 13, 2022

RBA Affirmed that Adjustments to YCC and QE would be Announced in July

November 17, 2022
Weekly Economic & Financial Commentary: Economic Storm Clouds or Just a Brisk

Weekly Economic & Financial Commentary: Economic Storm Clouds or Just a Brisk

November 17, 2022
Exela Technologies Named a Leader in NelsonHall’s Healthcare Payer BPS NEAT

Exela Technologies Named a Leader in NelsonHall’s Healthcare Payer BPS NEAT

November 24, 2022
Week of rate hikes has stocks on course for steepest slide since 2020

Week of rate hikes has stocks on course for steepest slide since 2020

November 24, 2022

City Index Announces Rebrand, Real-time Performance Analytics Function for UK

November 16, 2022
Gold Around 1,800 Border, Bearish Risks Linger

Gold Around 1,800 Border, Bearish Risks Linger

December 20, 2022
Biden nominates longtime USDA adviser to agricultural trade post

FOREX-Dollar gains with inflation data on tap, euro falls after ECB

December 6, 2022
U.S. House committee to hold aviation safety hearing – Reuters
Retail

Bed Bath & Beyond will shut down 5 KC-area stores, leaving only one in

February 4, 2023
U.S. House committee to hold aviation safety hearing – Reuters
Investing

Natural Gas Price Forecast – Natural Gas Markets Continue to See Negativity – FX

February 4, 2023
U.S. House committee to hold aviation safety hearing – Reuters
Gold

Gold Price Today (February 4): Yellow metal dips over Rs 2,500 from record high

February 4, 2023
U.S. House committee to hold aviation safety hearing – Reuters
Gold

Gold price drops nearly $50 as the U.S. service sector grows in January, the

February 4, 2023
U.S. House committee to hold aviation safety hearing – Reuters
Retail

Amazon Earnings: Retail Can't Be Propped Up by Cloud – Bloomberg

February 3, 2023
U.S. House committee to hold aviation safety hearing – Reuters
Gold

3 Skin Care Habits An Esthetician Wishes She Knew In Her 20s | mindbodygreen –

February 3, 2023
U.S. House committee to hold aviation safety hearing – Reuters
Gold

U.S. House committee to hold aviation safety hearing – Reuters

February 3, 2023
How Shiseido Digital SVP Omer Iqbal is Tracking Customer Data
Retail

How Shiseido Digital SVP Omer Iqbal is Tracking Customer Data

February 2, 2023

Politics

On the entanglement of race, religion, and politics in America : News Center

On the entanglement of race, religion, and politics in America : News Center

January 23, 2023
10 injured in shooting at Memorial Day party in Charleston

Erdogan announces Turkish elections to be held on May 14

January 22, 2023
Political news takes mental toll, but is disengaging the answer?

Political news takes mental toll, but is disengaging the answer?

January 19, 2023
George Santos Took $3,000 From Dying Dog’s GoFundMe: Report – Rolling Stone

George Santos Took $3,000 From Dying Dog’s GoFundMe: Report – Rolling Stone

January 18, 2023

Fianance

Netflix hasn’t confirmed its plans to stop password sharing just yet

Netflix hasn’t confirmed its plans to stop password sharing just yet

February 2, 2023
S&P 500 gains on Wednesday as investors shake off Fed’s latest rate hike, bet on falling

S&P 500 gains on Wednesday as investors shake off Fed’s latest rate hike, bet on falling

February 1, 2023
Gautam Adani no longer Asia’s richest person as stock rout deepens to $74 billion

Gautam Adani no longer Asia’s richest person as stock rout deepens to $74 billion

February 1, 2023
Adani Group Rules Out Changes In Price, Dates Of Sale Of New Shares

Adani Group Rules Out Changes In Price, Dates Of Sale Of New Shares

January 29, 2023

Oil&Gas

Inside the Fight to Save the Peruvian Amazon From Big Oil – Rolling Stone

Inside the Fight to Save the Peruvian Amazon From Big Oil – Rolling Stone

January 31, 2023
How a Single Oil Spill Can Disrupt the Global Energy Supply

How a Single Oil Spill Can Disrupt the Global Energy Supply

January 28, 2023
Sanctions-Proof Yuan to Putin’s Rescue After Oil Cap Hits Budget

Sanctions-Proof Yuan to Putin’s Rescue After Oil Cap Hits Budget

January 24, 2023
Oil market braces for fresh turmoil as EU prepares to cut off Russian diesel

Oil market braces for fresh turmoil as EU prepares to cut off Russian diesel

January 23, 2023
  • Contact Us
  • Terms of Use
  • Privacy Policy
  • DMCA
  • CCPA

© 2023 Financenewspress.com

No Result
View All Result
  • Home
  • Finance
  • Trade News
    • Dow Jones
    • Cryptocurrency
  • Investing
    • Diamonds
    • Gold
    • Oil & Gas
    • Automobiles
  • Forex Analytics
    • Central Bank Views
    • Market Overviews
  • Politics
  • Finance
  • Markets
  • Retail
  • Personal Finance
  • Real Estate

© 2023 Financenewspress.com

wpDiscuz