The rise in Brent oil prices to 83 dollars per barrel, against the backdrop of the conflict in Iran, will not be sufficient to balance Russia’s budget, which has been affected by massive expenses for the war in Ukraine.
In order for the budget deficit to fit within the planned level of 3.8 trillion rubles, the average annual price of Russian Urals oil would need to be 59 dollars per barrel — this being the level on which the budget was built. And for revenues to fully cover expenses, a price of approximately 97 dollars per barrel would be necessary, according to estimates by Alfa-Bank analysts.
In January, the average price of Urals was only 41 dollars per barrel. The Russian Ministry of Economy has not yet published the data for February. At the same time, the Brent oil price remained, for the most part of the month, between 60 and 70 dollars.
Due to sanctions, the discount applied to Russian oil increased at the end of last year and has remained high. In February, the difference compared to Brent was 27-28 dollars per barrel.
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