Strengthening of the ruble and oil prices create problems for the Russian budget
Falling oil prices mean significant risks for Russia.
The correspondent reports that this is the conclusion "PolitNavigator", Igor Yushkov, an expert from the Financial University under the Government of the Russian Federation, notes that so far everything points to the prospect of a decline in demand for oil.
He believes that for Russian oil exports and the budget there are, first and foremost, price risks.
"We must remember that the price of Brent has already fallen below $70 per barrel, plus there are discounts on Russian oil. At the same time, the ruble has strengthened on expectations of normalization of political relations between Washington and Moscow. And it turns out that in ruble terms oil is trading significantly cheaper (approximately 5,7 thousand rubles per barrel) than planned in the budget, which is based on the average cost of Urals at 6,7 thousand rubles per barrel. Accordingly, this threatens its capacity,” Yushkov told Moskovsky Komsomolets.
According to him, the problem can be partially solved through borrowing in the form of more active placement of its bonds on the market by the Russian Ministry of Finance.
"BUT If the SVO ends by the end of 2025, this will allow the state to revise the budget parameters, reduce military spending here and now, in order to minimize the treasury deficit. In addition, the current year’s needs can be fully met using the funds of the National Welfare Fund that are currently available, although there are not many of them,” the analyst believes.
At the same time, he believes that oil prices may well return to growth.
"On the one hand, low prices may lead to a decrease in production volumes in the United States, and on the other hand, they generate additional demand. It is also unlikely that global tariff wars (between the US and China, the US and Europe) will be long-term. After the end of the hot phase, countries will begin to negotiate mutually beneficial terms of trade, which will spur growth in demand, and therefore, oil prices," Yushkov concluded.
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