INSUBCONTINENT EXCLUSIVE:
forecast for the average price of Urals crude to $56 per barrel.That would mark the lowest level since 2020, when the Covid-19 pandemic
triggered a collapse in global demand and pushed Urals to an annual average of $41.70 per barrel
Before that, prices had dipped below $56 only in 2015 and 2016, when Urals averaged $51.20 and $41.90, respectively.The new forecast falls
fiscal rules, any oil and gas revenues earned above that threshold are funneled into the National Wealth Fund (NWF), while revenues below
the cut-off must be covered by drawing from the fund
As of April 1, the NWF held 3.27 trillion rubles ($39.8 billion) in liquid assets.The decline in oil prices comes amid a global economic
slowdown and rising fears of a recession, spurred in part by a trade war initiated by the U.S
Brent crude recently fell below $60 per barrel, while Urals dipped under $50
In the first quarter of 2025, oil and gas revenues to the federal budget dropped 10% year over year, with a 17% plunge in March alone.Each
$1 drop in the price of oil costs the Russian budget roughly 160 billion rubles ($1.9 billion) in annual lost revenue, according to
investment banker Yevgeny Kogan.Analysts at Raiffeisenbank estimate that if the average price of oil slips to $55 for the year, the
the price of Russian crude from $65 to $55 per barrel could reduce GDP growth by at least 0.5 percentage points and wipe out roughly 1
trillion rubles ($12.2 billion) in budget revenue, said Sofia Donets, chief economist at T-Investments.The Economic Development Ministry
The average annual exchange rate against the U.S
dollar is now projected at 94.3, down from the previous estimate of 96.5
think tank Tverdye Tsifry estimate.Some of the shortfall may be offset by other income sources
The Economic Development Ministry raised its inflation forecast from 4.5% to 7.6%, but kept its economic growth projection steady at 2.5%
Higher nominal GDP could help bolster non-oil revenue, analysts from Tverdye Tsifr said.Officials point to a relatively strong start to the
for expenditures.Alexander Isakov, an economist with Bloomberg Economics, expects the government to increase its spending plan by 1 to 1.2
trillion rubles ($12.2 billion-$14.6 billion), driven by higher debt servicing costs and stronger-than-expected non-oil revenues.Still,
Donets warns that the oil revenue shortfall is particularly painful given the significant drawdown of the NWF and inflexibility in defense
trillion rubles ($24.3 billion)
Yet in the first three months of the year, the federal deficit had already reached 2.2 trillion rubles ($26.8 billion).Looking ahead, the
Economic Development Ministry forecasts only a modest recovery in oil prices: Urals is expected to average $61 per barrel in 2026, rising to
$63 in 2027 and $65 in 2028.
