Russia has slashed its oil and gas export revenue forecast in a blow to Vladimir Putin’s economy and war chest. Weaker oil prices have led Moscow to cut its estimate, according to reports.
So far this year, proceeds from Russia’s sale of oil and gas have dropped by 15%, according to a document seen by the Reuters news agency. The drop adds to the pressure on the Kremlin’s budget, which is already under strain because of Russia’s war in Ukraine.
Reuters reports that Russia expects to earn £151billion ($200.3bn) this year from oil and gas exports, 15% less than last year’s £177bn ($235bn) and previous estimates in September.
Russia expects to earn £165.6bn ($220.4bn) in 2026, £173.6bn ($231bn) in 2027 and £183.4bn ($244.1bn) in 2028, down 4% and 1.1% and up 2.6% respectively on previous estimates, according to the outlet. It has not been possible to verify the figures.
Oil and gas are a lifeline for the Russian economy, making up almost a third of the country’s budget. Fossil fuels are also crucial in helping the country fund its multi-billion dollar war machine.
A recent plunge in oil prices caused by “extreme turbulence”, according to Kremlin spokesman Dmitry Peskov, threatened to unleash an “economic storm” on the Russian economy earlier this month.
In early April, Russia’s Urals blend fell to about $53 per barrel, below the $69.7 per barrel average Urals price which Moscow had been basing this year’s budget upon.
Oil prices fell in the wake of US President Donald Trump’s tariffs announcement. While Russia didn’t appear on a list of countries threatened by Mr Trump’s “reciprocal” tariffs, the country has not been immune to the chilling effect of the levies on global trade.
Experts have warned that a US trade war would slow the global economy, reducing demand for oil and gas.
In January, President Trump told the World Economic Forum in Davos that lower oil prices would end the Russia-Ukraine war. He urged Saudi Arabia and OPEC countries to reduce the cost of oil.
Western analysts have said Moscow is in no rush to conclude peace talks because it has momentum on the battlefield and wants to capture more Ukrainian land.
Both Russia and Ukraine are preparing for the spring-summer military campaign, according to Ukrainian and Western officials.
A planned meeting on Wednesday between top US, UK, French and Ukrainian diplomats to push for a peace deal between Russia and Ukraine was scrapped at the last minute amid little sign of progress in international efforts to end the war.
Foreign Secretary David Lammy announced that the talks in London would involve only lower-ranking officials after the US State Department said Secretary of State Marco Rubio could not attend because of a scheduling issue.
Mr Rubio’s cancellation raised doubts about the direction of the negotiations and came as Ukrainian President Volodymyr Zelensky ruled out ceding territory to Russia as part of any potential peace agreement.
The Ukrainian leader spoke in response to reports that the Trump administration was proposing a deal which would allow Russia to keep occupied Ukrainian territory as part of a potential peace deal.