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Russia’s Oil Price Forecast Cut Could Pressure Budget

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The downward revision of Russia’s forecasted crude export prices could put more pressure on Russia’s budget.

  • Russia’s Economy Ministry downgraded expectations for crude export prices for the next three years to $65/b.
  • This was cut from previous estimates of $71.3/b for 2024, $70.1/b in 2025 and $70/b in 2026, Reuters said.
  • Russian crude cargoes currently cannot access Western providers at prices above $60/b, known as the G7 price cap.
  • Lower oil prices could add additional pressures to Russia’s budget, which saw a shortfall of 0.3% of GDP in Q1, according to Reuters. Nonetheless, the Economy Ministry upgraded 2024 GDP growth forecasts to 2.8% from 2.3%.
  • Russia could also lose out in the long term due to lost gas flows to Europe. Gas prices to China – its target market - are expected to be up to 28% lower than to Moscow’s remaining European clients through to 2027.
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The downward revision of Russia’s forecasted crude export prices could put more pressure on Russia’s budget.

  • Russia’s Economy Ministry downgraded expectations for crude export prices for the next three years to $65/b.
  • This was cut from previous estimates of $71.3/b for 2024, $70.1/b in 2025 and $70/b in 2026, Reuters said.
  • Russian crude cargoes currently cannot access Western providers at prices above $60/b, known as the G7 price cap.
  • Lower oil prices could add additional pressures to Russia’s budget, which saw a shortfall of 0.3% of GDP in Q1, according to Reuters. Nonetheless, the Economy Ministry upgraded 2024 GDP growth forecasts to 2.8% from 2.3%.
  • Russia could also lose out in the long term due to lost gas flows to Europe. Gas prices to China – its target market - are expected to be up to 28% lower than to Moscow’s remaining European clients through to 2027.