A critical mark for the Russian Federation budget is considered to be an oil price of $ 50. If the cost drops to this level, the Russian government will need to reduce costs, which is difficult to do in war conditions.
The price of Russian Oal oils has dropped to $ 54 per barrel, which has been a minimum indicator over the past 14 months. This creates serious risks for the Russian Federation budget, where more than one third of the income provides the sale of oil and gas. Reuters are aware of this on Thursday, March 13.
On March 11, in the ports of the Baltic Sea, the Urals were sold at $ 53.95 per barrel, at Novorossiys – at $ 55.94. It was 23% lower than January, when the price reached $ 70, and 10% less than the end levels of 2023.
The level laid on the Budget of the Russian Federation is $ 69.7 per barrel, so the current prices are behind the forecast of more than 20%. A critical mark for the Russian Federation budget is considered $ 50, Evgeny Suvorov’s note, economist of the Bank of Central Credit. If the cost drops to this level, the Russian government will need to cut costs, which is difficult to do in war conditions.
According to the budget rule, if the oil price drops below $ 60, the National Welfare Fund funds will spend to cover the deficiency. However, fund reserves are almost exhausted: by the end of February there is only $ 37.5 billion in Chinese Yuan and gold.
The war significantly exhausted Russia’s financial reserves – from the beginning of a full aggression, the costs from the funds increase three times. In total, more than 6.5 trillion rubles were spent on the panting hole and support for state corporations in the Russian Federation.
In February, Russian budget revenues from oil and gas fell 18% to 771.3 billion rubles. Budget deficiency in just two months of 2024 exceeded the annual plan of 2.7 trillion rubles (1.3% of GDP).
Russian Federation’s Deputy Minister Vladimir Kolychev admitted that the deficiency could exceed the forecast of 1% of GDP, which is about 2 trillion rubles. Thus, the Russian government will probably check its costs and look for additional financing sources.
As you know, US president Donald Trump called Saudi Arabia and OPEC to reduce oil prices. In his opinion, it will help to quickly end Russia’s war against Ukraine.
Ukraine recommends set the maximum price for Russian oil for $ 30 per barrel.
Oil price fell to the lowest level from 2021
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.