
The Kremlin said it’s doing everything possible to minimize the impact of a global oil price rout on Russia’s economy as the nation’s key export grade plunges toward $50 a barrel for first time in 21 months.
“We are very closely monitoring the situation, which is currently characterized as extremely turbulent, tense and emotionally overloaded,” the Interfax cited Kremlin spokesman Dimitri Peskov as saying Monday. Russian authorities are working to minimize “the consequences of this international economic storm for our economy.”
Crude prices are critical for Russia’s federal budget, which relied on oil and gas for almost 30 percent of its proceeeds in January-February, according to government data. As the nation’s spending in the first two months of the year accelerated due to the war in Ukraine, any decline in revenues could put pressure on the nation’s finances.
The country’s Urals grade, by far the country’s top export stream, slumped to $52.76 a barrel at the Baltic Sea port of Primorsk on Friday, data from Argus Media show. It was last below $50 in June 2023.
Russia, which leads the OPEC+ producer alliance alongside Saudi Arabia, is closely monitoring the oil price decline, which Peskov said was driven by “the US decision to introduce tariffs for most countries in the world.”
Last month, Russia’s Finance Ministry said that expected the average oil price in 2025 to be closer to $60 a barrel instead of the $70 that the country had budgeted for the year, according to Prime newswire. In that scenario, it forecast the budget deficit would increase though by no more than 1 percent of gross domestic product.
Headline oil prices have collapsed in the wake of wide-ranging tariffs that the US announced last week on the nation’s trading partners, clouding the global demand outlook. On top of that, OPEC+ group is pledging to boost output next month, while Saudi Arabia has lowered its oil prices.
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