Russia’s oil-export revenue in December dropped to a six-month low as declining crude prices offset the highest overseas flows since last spring, according to the International Energy Agency.

The top-three global oil producer earned $14.4 billion from foreign sales of its crude and oil products in December, down nearly 9% from the month before, the Paris-based agency said in its monthly oil report on Thursday. 

“Russian oil price discounts increased and benchmark oil prices declined,” the IEA said. As a result, revenue dropped even though the nation hiked its oil flows abroad to 7.8 million barrels a day, the highest since March.

Revenue from oil production and exports are a key source of funds for the Russian government’s budget, which is burdened by massive spending on the war in Ukraine and the need to maintain social expenditure ahead of presidential elections in March. 

In a move to reduce the flow of petrodollars to Russian coffers without disrupting immediate oil supplies to the global market, Western nations and their allies have imposed several rounds of energy sanctions against the Kremlin. 

In particular, the Group of Seven industrialized countries imposed a $60-a-barrel cap on Russian crude sales. While most countries are free to buy the barrels at a higher price, they cannot access such western services as shipping and insurance.

For months, Russia successfully ignored the restrictions by amassing a large shadow fleet of tankers to carry its oil to buyers in China, India, Turkey and Latin America. However, in the recent months the US has tightened monitoring of the cap compliance, targeting Russia-linked traders, vessels and shipowners for violation of the threshold.

As a result, the discount of Urals, Russia’s key oil-export blend, deepened in December “under pressure from the expanded US Treasury investigation,” the IEA said.

The Urals price last month fell by some $10 per barrel to just below the $60 cap, the agency’s calculations show. The weighted-average export price of a Russian barrel, which also includes the price of the premium ESPO blend, fell more than 10% to $64.10 in December, according to the report. 

However, the “widening discounts to North Sea Dated accounted for about one-third” of the Urals decline, while the rest resulted from generally lower international oil prices, the Paris-based agency estimated.