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Russia’s Ministry of Economic Development has revised downward its average annual forecast for the price of Urals crude oil for 2025, dropping it to $56 per barrel, Interfax news agency reports. This is the lowest estimate since 2020, when the pandemic caused a collapse in oil demand.
For comparison, in 2020, Urals cost an average of $41.7, and before that, such low prices were recorded only in 2015-2016 ($51.2 and $41.9, respectively), The Moscow Times notes.
The new forecast is significantly lower not only than the baseline figure included in the Russian state budget ($69.7), but also than the “cut-off price” ($60), which is used to plan public spending. As a result, oil and gas revenues will be lower than expected, forcing the government to make up the shortfall from the National Welfare Fund (NWF).
As of 1 April, the NWF’s liquid assets stood at RUB 3.27 trillion, which allows it to temporarily cover the shortfall in revenues, but in the long run it signals Russia’s financial vulnerability, in particular due to sanctions pressure and limited access to markets.
