Russian Government Moves to Tighten Budget Rule as Oil Income Shrinks
Russian Government Moves to Tighten Budget Rule as Oil Income Shrinks

Russian Government Moves to Tighten Budget Rule as Oil Income Shrinks

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Russian Government Moves to Tighten Budget Rule as Oil Income Shrinks

Under current rules, oil and gas revenues earned above $60 per barrel are directed into the National Wealth Fund. Shortfalls are covered by drawing from the savings fund. The threshold will be lowered to $55 per barrel starting in 2026.

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Russia’s government will gradually lower the oil price threshold used to calculate revenue under its “budget rule” as it seeks to make public finances less vulnerable to energy market volatility and Western sanctions, Finance Minister Anton Siluanov announced Thursday.

Under the current budget rule, oil and gas revenues earned above $60 per barrel of Urals crude are directed into Russia’s National Wealth Fund (NWF). Shortfalls are covered by drawing from the savings fund.

To plug this year’s ballooning budget deficit, driven by enormous defense spending, the government plans to draw around 447 billion rubles ($5.39 billion) from the NWF’s estimated 4 trillion rubles ($48.25 billion).

Siluanov said on Thursday that the cut-off oil price would be lowered by $1 every year starting in 2026, with the threshold ultimately falling to $55 per barrel by 2030.

“We must make the budget more muscular, one that would respond to any restrictions we face,” Siluanov said at the Moscow Financial Forum.

He did not specify whether the adjustment would continue regardless of future oil price fluctuations.

Source: Themoscowtimes.com | View original article

Source: https://www.themoscowtimes.com/2025/09/18/russian-government-moves-to-tighten-budget-rule-as-oil-income-shrinks-a90561

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