The Central Bank of the Russian Federation has presented an updated “risk” scenario regarding the development of the country’s economy in the event of intensified sanctions and a sharp drop in oil prices to $35 per barrel. According to this forecast, Russia’s gross domestic product may shrink by 2.5–3.5% in 2026 and by another 2–3% in 2027. Inflation could rise to 10–12%, while the key interest rate may reach 16–18% in 2026 and 18–20% in 2027.
This is reported by Finway
Economic Stagnation and Declining Oil Revenues
The head of Sberbank of Russia, Herman Gref, stated that by the second quarter of 2025, the economy of the Russian Federation had entered a state of technical stagnation. During this same period, revenues of the federal budget from oil and gas exports, which traditionally account for a quarter of all revenues, decreased by 35% in August 2025 compared to the same month last year, and by 36% compared to July. Over the first eight months of 2025, total revenues from oil and gas fell by 20.2%, amounting to 6.03 trillion rubles.
Losses in the Oil and Gas Sector and External Pressure Factors
According to information from Ukraine’s foreign intelligence, during the first half of 2025, the overall performance of Russian oil and gas companies fell by 50.4%. About 45% of companies ended the first half of the year with losses totaling $9.4 billion. Among the main reasons for this decline are the decrease in the price of Russian Urals oil from $70 in January to $59.8 in June (a 30% drop in rubles), the impact of Western sanctions, reduced exports, a shortage of tankers, and port congestion.
“Meanwhile, the head of Sberbank of Russia, Herman Gref, noted that the Russian economy had already entered a phase of ‘technical stagnation’ in the second quarter of 2025.”
Additional pressure on the Russian economy may also arise from a possible decision by OPEC+ countries to increase oil production quotas, which could lead to further declines in prices for this resource. Furthermore, Canada has reduced the ceiling price for Russian oil by 12%, from $60 to $47.6 per barrel.
Another significant factor is that proven profitable oil reserves in the Russian Federation are expected to last only 25 years at the current level of production. Without significant investments and the implementation of new extraction technologies, production may begin to decline sharply in the coming years. In the context of intensified Western sanctions and the accelerated abandonment of hydrocarbons by countries worldwide, by 2050, Russia may only be able to extract 171 million tons of oil per year — more than 66% less than now, with no possibility of exporting the extracted oil.