A major tax overhaul in Russia’s oil industry is about to start pressuring the earnings of major oil companies. Refiners will be hit hardest as the overhaul will increase the tax burden on downstream operations while the upstream sector will see taxes shift from production-based to profit-based. Last week, the Finance and Energy Ministries announced that they had agreed with oil companies to begin phasing out oil export duties by 5 percent annually over the next six years, from 30 percent now to zero in 2023. The producers are happy about this: the duty—along with a so-called mineral resource tax based on production size—will be replaced by a profit-based tax that, oil companies say, will stimulate investments in production expansion. Yet their happiness is not all-encompassing. S&P Platts writes that the phase-out of the oil export duty actually seeks to reduce state support for the local refining industry, which […]