博彩对冲

Russia is preparing its economy for lower oil prices as its Urals crude export blend is traded at below $60 per barrel in Russian ports, having recovered from a plunge to below $50/bbl last week.

The revised social and economic development forecast for 2025-27 prepared by the economic development ministry envisages that the Urals price would average $56/bbl this year as opposed to the $69.7/bbl level that Russia鈥檚 2025 budget is based on, Russian mass media reported on Apr. 22.

Urals is now seen at $61/bbl in 2026, $63/bbl in 2027 and $65/bbl in 2028 compared with the previous figures under the base-case scenario of $66/bbl in 2026 and $65.5/bbl in 2027. Even the previous conservative scenario didn鈥檛 envisage such a decline as outlined in the latest forecast.

The Urals discount to international benchmark Brent crude would amount to some $12/bbl this year, narrowing to $7/bbl by 2028, according to the economic development ministry's revised forecast.

Analysts say the oil price decline represents a huge risk for the state budget, which could face the need to cut expenses and print more money.

Russian corporations could be more resilient, as their tax load would reduce under lower prices. However, the companies themselves see it as a major challenge that would necessitate a review of their plans.

Corporate View

Marina Sedykh, the head of INK-Capital, a holding firm that controls Russia鈥檚 mid-sized Irkutsk Oil (INK), told journalists on the sidelines of the Eurasia Oil and Gas Forum in Moscow last week that a price of $50/bbl would force the company to cut investment.

To ensure financial stability, INK鈥檚 investment plans for the next two years are based on a Urals price of $50/bbl. If the price were higher, INK would invest in seven undeveloped license areas in East Siberia, which it could not justify under current prices.

Sedykh also noted that current prices do not stimulate oil firms to export their barrels.

Some market experts agree that lower prices could force companies to send their crude to domestic refineries, even though the country鈥檚 refining fleet is undergoing seasonal maintenance. In the first half of April, Russia's daily oil exports were slightly down on March, even though the maintenance period was supposed to free more barrels for export.

Rosneft CEO Igor Sechin has long been warning about a possible price decline this year, even to as low as $40/bbl.

In March, when the Urals price dropped to below $60/bbl, Gazprom Neft head Alexander Dyukov was quoted as saying that the price was 鈥渁cceptable.鈥�

One industry expert told 博彩对冲 that Russian companies could survive even if prices fall to $20/bbl, as opposed to US shale oil producers that require higher prices to sustain their operations.

No State Support

Probably with this idea in mind, Russia's finance ministry was not planning to initiate any changes in tax legislation following the global oil price decline, Deputy Finance Minister Alexei Sazanov said.

Denis Borisov, department director at the finance ministry, also noted at the Eurasia Oil and Gas Forum that there was no sense in expanding allowances while the Opec-plus production limitations are in place.

Commenting on the risks for the state budget, Sazanov said that volatility on the oil market has always been high, as it has on all other raw material markets. "We have been through worse situations," he told news agency RIA Novosti.

The economic development ministry believes the oil price decline would not have a significant impact on real GDP growth, which is expected at 2.5% this year and 2.4% in 2026, down from 4.3% in 2024.

Still, an oil price of $50/bbl is seen as a stress scenario that would have inevitably negative consequences for the budget and for the rainy-day National Welfare Fund, whose reserves could be exhausted rather fast, Russian authorities admit.

Much would depend on how long prices would stay low and on any actions by Opec-plus, whose members are not interested in low prices, Russian analysts say. The need for sanctions to be lifted would become more crucial under lower prices, they say.