In the long term, forecasts suggest that oil may become cheaper due to lower demand and the growing popularity of renewable energy sources.
A key source of funds for the Kremlin will decrease by 14% from 2024 to 2027, with implications for the war in Ukraine and the increase in Moscow’s military spending, according to a draft three-year budget seen by Bloomberg.
The Russian government expects the oil and gas industry to contribute 10.94 trillion rubles ($118 billion) in taxes to the state budget in 2024, which is 3.3% lower than forecast for the year. In addition, revenues will decrease in the next two years and will reach RUB 9.77 trillion in 2027.
Oil revenues have allowed the Kremlin to wage a full-scale war against Ukraine in its third year, even as the West has given Ukraine billions of dollars in military aid and imposed several rounds of sanctions aimed at limit Russia’s income from energy exports.
Russia circumvented these restrictions by creating a shadow fleet of tankers to deliver oil and liquefied natural gas to new customers in Asia.
While current forecasts for declining revenues reflect the weakening of global energy markets. Russia’s average oil export price, according to the documents, could drop below $70 per barrel starting next year.
Average contract prices for Russian gas are also expected to decline until 2027.
In the long term, forecasts suggest that oil may become cheaper due to lower demand and the growing popularity of renewable energy sources.
As reported, world oil prices are dropping dramatically due to market participants’ concerns about the prospects for demand for “black gold.”
Source: korrespondent
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