The price of Russian oil in rubles fell below 4 thousand rubles per barrel – this is the lowest over the past two years and 40% less than in the state budget.
Many analysts believe that the Kremlin will have to increase taxes, reduce the costs of social programs and increase borrowing if he wants to balance the budget without reducing defense costs.
Donald Trump said that a decrease in oil prices increases pressure on Russia and increases the likelihood of a peace agreement to terminate the war in Ukraine. Reuters writes that a sharp decrease in oil prices is associated with the OPEC+ solution to increase oil production.
OPEC+ is a coalition of oil export countries, which includes official participants (OPEC) and key non-members such as Russia. They coordinate the level of production to stabilize the prices of world oil. The largest oil production in the world is Saudi Arabia, which has the greatest influence on OPEC.
On May 5, Brent Oil fell by 3.33% to $ 59.25 per barrel, and intermediate (WTI) – from $ 3.60% to $ 56.19 per barrel. These are the lowest levels for both brands from April 9, 2025.
In prices for Brent and WTI prices, we see that prices are rarely approaching $ 60 per barrel. This happened in April 2025, but since 2021 they have not reached such a low level.
OPEC+ announced that in June it will increase production by 411 thousand barrels per day, accelerating the increase in oil production in the second month in a row. An increase in production was initiated by Saudi Arabia, because Iraq and Kazakhstan exceeded their quotas for production.
If the quota is not respected, according to Reuters sources, OPEC+ will potentially completely cancel the reduction that the members agreed in 2023 to stabilize the market. All this can lead to an excess in the oil market and a further drop in prices.
How will this affect Russia?
One of the main sources of financing the Russian budget is oil export income, since access to foreign reserves and the sale of gold was limited by sanctions, and the reserves of the Russian National Social Security Fund were reduced from $ 148 billion to 35 billion dollars in 2025.
A significant drop in oil prices will be a significant blow to the Russian budget and will complicate the financing of military operations.
Source: Racurs
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.