May 2, 2025
Russia Cuts Energy Revenue Projections by 24% as Oil Prices Fall.
Russia anticipates a 24% decrease in oil and gas revenues this year compared to prior predictions, following a drop in oil prices that began in early April, bringing the price of its main Urals crude close to $50 per barrel.
The finance ministry now estimates oil and gas revenues at around $101.7 billion (8.32 trillion rubles) for 2025, down from the earlier expectation of $133.7 billion (10.9 trillion rubles).
Oil and gas revenues, crucial for Russia's budget, are projected to make up 3.7% of GDP, a reduction from the previously anticipated 5.1% due to the recent decline in oil prices.
Consequently, the finance ministry has also increased its budget deficit forecast to 1.7% of GDP for 2025, up from the prior estimate of 0.5% of GDP.
The latest projections have lowered the anticipated price of Russian crude from $69.70 per barrel to $56 per barrel for 2025.
Over the past month, oil prices have dropped by about $10 per barrel, with Brent Crude holding just above $60 per barrel, influenced by global economic concerns from trade disputes and indications from Saudi Arabia that it may increase oil production more rapidly than expected, even at the cost of enduring low prices.
As a member of OPEC+, Russia will also be impacted, particularly as it increases funding for the war in Ukraine while its crude is sold at discounts to Brent due to Western export sanctions.
The reduced price of Russian crude could adversely affect the economy, warned Central Bank Governor Elvira Nabiullina last month.
“If the trade wars escalate, this typically results in a decrease in global trade and the economy, potentially reducing demand for our energy resources. Thus, there are inherent risks,” Nabiullina stated.
The finance ministry now estimates oil and gas revenues at around $101.7 billion (8.32 trillion rubles) for 2025, down from the earlier expectation of $133.7 billion (10.9 trillion rubles).
Oil and gas revenues, crucial for Russia's budget, are projected to make up 3.7% of GDP, a reduction from the previously anticipated 5.1% due to the recent decline in oil prices.
Consequently, the finance ministry has also increased its budget deficit forecast to 1.7% of GDP for 2025, up from the prior estimate of 0.5% of GDP.
The latest projections have lowered the anticipated price of Russian crude from $69.70 per barrel to $56 per barrel for 2025.
Over the past month, oil prices have dropped by about $10 per barrel, with Brent Crude holding just above $60 per barrel, influenced by global economic concerns from trade disputes and indications from Saudi Arabia that it may increase oil production more rapidly than expected, even at the cost of enduring low prices.
As a member of OPEC+, Russia will also be impacted, particularly as it increases funding for the war in Ukraine while its crude is sold at discounts to Brent due to Western export sanctions.
The reduced price of Russian crude could adversely affect the economy, warned Central Bank Governor Elvira Nabiullina last month.
“If the trade wars escalate, this typically results in a decrease in global trade and the economy, potentially reducing demand for our energy resources. Thus, there are inherent risks,” Nabiullina stated.