War impacts Russian companies, leading to massive monetary losses
The war in Ukraine, orchestrated by President Vladimir Putin, is not only affecting Ukrainians but also causing significant losses to Russian businesses. From January to June 2023, their revenues amounted to 342.2 billion rubles, a dramatic drop from 694 billion rubles recorded during the same period in the previous year.
8:44 AM EST, December 5, 2023
A review conducted by "The Moscow Times" has shed light on the financial predicament Russian firms face during the war. The data from the Federal Tax Service's analytical portal reveals a stark decline in revenues of Russian companies in the first half of 2023. The revenue for the period from January to June was 342.2 billion rubles, compared to 694 billion rubles during the corresponding period of the preceding year.
An analysis from Russia's Bank of financial stability notes a 41 percent fall in revenue for the largest oil and gas exporters, compared to the same period last year.
Fyodor Akulinan, an Associate Professor at the Department of Corporate Order and Innovation, suggests the plunging average price of the Russian brand of oil, Ural, contributes to the slump in revenues. Data from the Ministry of Finance shows that the Ural's cost was $62.89 per barrel from January to November 2023, marking a 25 percent decrease from the previous year.
Sergey Gebel, the CEO of Gebel Consulting Group, asserts that the drop in company revenues can be attributed to sanctions, logistics hitches, and restructuring of production processes.
"It is highly unlikely that company revenues will bounce back to previous years' levels by the end of the year," cautions ASTRA-SB manager Anton Vdovichenko.
He opines that the geopolitical situation coupled with volatile oil prices will significantly influence Russia's domestic economy for many years.
Putin turns to businesses in search of war funds
With 2.5 months remaining to mark two years since Russia initiated the unlawful invasion of Ukraine, Western sanctions aimed at depriving the Kremlin of war funds are biting. President Vladimir Putin, predictably, is doing all it takes to prevent financial exhaustion.
Russia is considering the imposition of a super-profit tax on large firms, as a strategy to replenish its depleted budget. Interestingly, this proposal does not extend to the wealthy Russian businesses operating in the oil and gas sector.
