Russia expects lower exports and oil prices this year - Bloomberg
Kyiv • UNN
Russia has worsened its forecast for oil exports this year and lowered its Urals price expectation to $56 per barrel. According to the forecast, this may require the use of reserves to cover expenses.
Russia has worsened its forecast for exports this year and lowered expectations for the price of its oil. These events could force the government to invest funds from its National Welfare Fund to cover war expenditures, writes UNN with reference to Bloomberg.
Details
The Ministry of Economy forecasts an export drop of 5.3% to 410.6 billion rubles ($5 billion), down from the previous forecast of 445 billion rubles. The updated macroeconomic forecast also included a reduction in the Urals oil price to $56 per barrel from $69.70 per barrel previously.
Although the revised forecasts mean the Russian government will receive less revenue from oil sales, it will not affect the Kremlin's ability to finance its war machine. Rising revenues from non-energy sectors and its significant reserves will help offset losses. Russia's National Welfare Fund has sufficient resources to compensate for any oil revenue deficit over the next 18-24 months, even if the country's oil costs around $50 per barrel.
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Urals oil, Russia's main export blend, fell to $52.76 per barrel at the Baltic Sea port of Primorsk earlier this month, according to Argus Media data. It was last below $50 in June 2023.
The Ministry of Economy forecasts the Brent oil price at $68 per barrel, compared to $81.70. The price of Brent briefly fell to a four-year low below $60 a barrel earlier this month after China and the U.S. escalated their trade war and the OPEC+ group pledged to increase output next month.
The ministry maintained its growth forecast for 2025 at 2.5%, while lowering its forecast for 2026 to 2.4% from 2.6% seen previously. Officials acknowledged persistent price growth despite the central bank's record-high key rate of 21%, forecasting inflation at 7.6% by year-end, compared to 4.5% in its latest forecast.
Additional information
Oil fell in price as traders were concerned about the impact of the US-led trade war on energy demand, while also monitoring negotiations between Washington and Tehran on Iran's nuclear program.
