Russia expects 24% lower revenues from oil and gas this year compared to earlier estimates, following the oil price crash that began in early April and sank the price of its flagship Urals crude close to the $50 per barrel mark.
Russia now sees its oil and gas revenues at about $101.7 billion (8.32 trillion Russian rubles) for 2025, according to the finance ministry’s latest update. That’s lower than the $133.7 billion (10.9 trillion rubles) expected earlier.
Oil and gas income – a key pillar of Russia’s budget revenues – is now expected to account for 3.7% of gross domestic product (GDP), down from 5.1% of GDP expected until the most recent oil price slide.
As a result of lower oil prices, Russia’s finance ministry has also tripled the estimate of its budget deficit—to 1.7% of GDP for 2025, up from a deficit of just 0.5% of GDP previously expected.
In the latest forecast, Russia slashed its expected price of Russian crude from $69.70 per barrel to $56 a barrel for 2025.
Oil prices have slipped by about $10 per barrel over the past month, with Brent Crude prices barely holding to the $60 a barrel mark early on Thursday, amid concerns about the global economy in the trade wars and Saudi hints that the world’s top crude exporter the OPEC+ leader could raise oil production faster than expected and could be prepared to suffer a period of low oil prices.
Russia, also a member of OPEC+, will also suffer, especially as it is pouring more money into the war in Ukraine while its crude oil is priced at discounts to Brent due to the Western sanctions on its exports.
The lower price that Russian crude fetches could hit Russia’s economy, Russia’s Central Bank Governor Elvira Nabiullina warned last month.
“If the escalation of the tariff wars continues, this usually leads to a decline in global trade and the global economy and, possibly, demand for our energy resources. Therefore, there are risks here,” Nabiullina was quoted as saying.
By Tsvetana Paraskova for Oilprice.com
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