Russian oil price falls short of 2025 budget target – Reuters

The average price of Russian oil, calculated in roubles, remains below the federal budget target for 2025, adding pressure to a budget already grappling with a growing deficit.

Source: Reuters

Details: The shortfall is largely due to a stronger rouble, which has risen by approximately 45% since the start of the year, driven by eased geopolitical tensions and the Central Bank’s tight monetary policy. Meanwhile, international oil prices in dollars have dropped by about 10%.

Estimates indicate the average price of the Russian oil blend, calculated for tax purposes, reached RUB 4,701 (about US$60,11) per barrel in the first two weeks of July – similar to June’s level but 11.1% below the updated budget target.

The Russian Finance Ministry reported last week that the budget deficit hit RUB 3.69 trillion (about US$47.31 billion), or 1.7% of gross domestic product, in the first half of the year, aligning with the full-year forecast.

Russia raised its 2025 budget deficit projection to 1.7% of GDP in April, up from 0.5%, after slashing its energy revenue forecast by 24% in anticipation of lower oil prices for a prolonged period of time.

Public spending on national defence in 2025 increased by a quarter to 6.3% of GDP, the highest since the Cold War, as the country continues its full-scale war in Ukraine, now in its fourth year.

Background: Russian oil supplies have dropped to their lowest level since February.

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