The price of Russian oil in rubles has fallen below 4,000 rubles per barrel — the lowest level in the past two years and 40% less than projected in the state budget. According to Reuters, the average price of Urals and ESPO crude has decreased to $48.92 per barrel, which is about 3,900 rubles. This is significantly lower than the budgeted figure of 6,700 rubles.
This is reported by Finway
Many analysts believe that the Kremlin will need to raise taxes, cut spending on social programs, and increase borrowing to balance the budget without reducing defense expenditures. The drop in oil prices is linked to forecasts that global oil production will exceed consumption. Over the last six trading sessions, global oil prices have fallen by more than 10%, and over 20% since April. This decline has been attributed to statements by U.S. President Donald Trump regarding trade tariffs, which raised concerns about a global economic slowdown.
The cost of oil is also influenced by the OPEC+ decision (which includes Russia) to accelerate production rates. Donald Trump noted on Monday that Moscow and Kyiv are eager to end the war, and that Russian President Vladimir Putin has become more inclined towards peace following the drop in oil prices.
Energy resources account for about one-third of Russia’s budget revenues. In light of falling prices, the government last week raised its budget deficit forecast for 2025 from 0.5% to 1.7% of GDP. This adjustment came after a 24% reduction in the forecast for energy revenues due to expectations of a prolonged period of low oil prices.