Russian Oil Price Collapsed Below $50 Per Barrel For The First Time Since Spring
3- 17.10.2025, 14:17
- 9,772
The Kremlin's budget has a new headache.
The Russian budget, which is rapidly losing oil and gas revenues, has received a new headache.
The price of Urals, the main export brand of Russian oil producers, has fallen below $50 per barrel for the first time since spring. As Reuters reports citing traders, quotations in the port of Primorsk on the Baltic Sea in the middle of the week fell to $47.4 per barrel.
As a result, Urals for the first time went below the updated price ceiling of the European Union, which is set at $47.6.
Russian oil is getting cheaper following the global oil quotations, which this week updated the minimums since May. The cost of Brent has fallen 15% in three weeks and now sits just above $60.
The reason is a truce between Israel and Hamas, which has reduced tensions in the Middle East and threats to tankers traveling through the Suez Canal and Red Sea, said Vjarn Schildrop, an analyst at SEB. The market is now focused on the oil surplus orchestrated by OPEC+ countries ramping up production, points out ANZ analyst Daniel Hines.
The cartel increased supplies by 2.2 million bpd from April to September, and could add another 1.2 million barrels of daily output to the market next year. As a result, the world's oil surplus next year could become a record high in history - 4 million barrels per day, according to the International Energy Agency's forecast.
Falling oil prices promise new problems for Russia's federal budget, which lost 21% of commodity revenues in January-September. Initially, the draft treasury for 2025 was drawn up on the basis that a barrel of Urals would be $70, but later the target level was lowered to $58. Along with it, the plan for oil and gas revenues was radically reduced: instead of Br10.9 trillion, the authorities now expect only Br8.6 trillion.
In the 2026 budget, the Finance Ministry has budgeted for Urals at $59 and the preservation of raw materials revenues at a low level - Br8.9 trillion, which is 20% lower than in 2024. With record military expenditures, this promises a deficit of Br3.8 trillion for the treasury, according to the Ministry of Finance's estimates.
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