Russia's oil, gas budget revenue falls by a third in May

MOSCOW, June 4 (Reuters): Russia's oil and gas revenue fell by 35 per cent year-on-year in May to 512.7 billion roubles ($6.55 billion), data from the finance ministry showed on Wednesday, as weakening oil prices and sanctions weighed on the country's economy.

Russia needs higher oil prices to balance its budget and fund its military operation in Ukraine.

Sources with knowledge of the talks told Reuters that Russia opposed recent oil output hikes by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+.

Oil and gas revenue has been the most important source of cash for the Kremlin, accounting for about a quarter to half of total federal budget proceeds over the past decade.

According to the finance ministry, revenue in May fell to 512.7 billion roubles ($6.55 billion), 35 per cent lower that in the same month a year ago.

Revenue also fell by 53 per cent from April as global oil prices declined. The finance ministry also said it expected oil and gas revenue in June to be less by 40.3 billion roubles than had been planned.

The fall in oil prices have been painful for Russia, which ran a budget deficit of 3.2 trillion roubles, or 1.5 per cent of gross domestic product, in the first four months of the year.