The government estimates that oil revenue will drop by 14%, to roughly $120 billion in 2025 (a 3.3% decrease from the present year) and then to $110 billion by 2027. Russia has a history of using cautious estimates for oil prices in its budgeting to lessen the impact of negative changes in the market on state spending.
The budget for 2024 is predicated on the assumption that the average price of Brent petroleum will be $70 per barrel, with a gradual fall to $65.5 by 2027. It is also anticipated that throughout this period, natural gas prices will decline.
Russia has already experienced a sharp decline in oil earnings this year, especially in spite of growing export volumes; since June, the value of its crude exports has dropped by 30%. Urals crude, the nation’s principal export blend, fell below the $60 price threshold set by the G7 but has since risen to nearly $67 per barrel.
The draft budget makes a suggestion that, despite present trends to the contrary, global initiatives toward energy transition may, in the medium run, reduce the demand for crude oil. Even if there are still worries about China’s oil consumption, the country’s imports of oil from Russia and Iraq increased significantly in August.
