Russian Finance Minister Issues Warning on Budget
The country must revise its regulations to cope with declining oil revenues and global trade tensions, Finance Minister Anton Siluanov has stated. Siluanov has warned that Russia should prepare for potential budgetary challenges stemming from...
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The country must revise its regulations to cope with declining oil revenues and global trade tensions, Finance Minister Anton Siluanov has stated.
Siluanov has warned that Russia should prepare for potential budgetary challenges stemming from falling oil revenues and global economic uncertainties. During a recent ministry meeting, he advocated for increasing fiscal reserves and updating an “outdated” budget rule that dictates that oil revenues surpassing a $60-per-barrel threshold be redirected to the National Wealth Fund.
This fund, intended to protect the economy from fluctuations in commodity prices, especially oil, should be sufficient to support “three years of uninterrupted financing of expenditures,” according to Siluanov.
He emphasized, “The current global situation requires special attention to the resilience of public finances to various scenarios of global economic development.” He pointed out that the primary risk continues to be the “unfolding of trade wars,” which limit export opportunities for nations, including Russia.
Siluanov remarked that spending must adapt to the “new realities,” stating, “We’ll have to be more modest in our desires and ensure a greater return on every budget ruble.”
In his remarks, he highlighted that oil and gas revenues now represent only a quarter of the federal budget, indicating a notable decrease in reliance on the sector. Preliminary estimates from the Finance Ministry indicate that oil and gas revenues amounted to 2.64 trillion rubles in the first quarter of 2025, a decrease of 9.8% compared to the same period in 2024.
Prime Minister Mikhail Mishustin also spoke at the meeting, stressing the importance of maintaining macroeconomic stability and being prepared to respond to market shifts. “It is important to pay special attention to measures to prevent budget risks,” he pointed out. “We must, of course, be prepared for changes and work out a variety of scenarios based on the current situation.”
Since early April, oil prices have continued to decline, influenced by U.S. trade tariffs and OPEC+’s unexpected decision to increase production. The member countries reached an agreement to raise output by 411,000 barrels per day starting in May, significantly higher than the initially planned increase of 135,000 barrels per day.
On April 9, the price of Russia’s Urals crude dropped below $50 per barrel for the first time since June 2023. Earlier in March, the Finance Ministry had projected that the average oil price for 2025 would be closer to $60 per barrel, a reduction from the budgeted $70. The Economic Development Ministry's forecast is even more conservative, predicting an average of $56 per barrel.
Sophie Wagner contributed to this article for TROIB News
Siluanov has warned that Russia should prepare for potential budgetary challenges stemming from falling oil revenues and global economic uncertainties. During a recent ministry meeting, he advocated for increasing fiscal reserves and updating an “outdated” budget rule that dictates that oil revenues surpassing a $60-per-barrel threshold be redirected to the National Wealth Fund.
This fund, intended to protect the economy from fluctuations in commodity prices, especially oil, should be sufficient to support “three years of uninterrupted financing of expenditures,” according to Siluanov.
He emphasized, “The current global situation requires special attention to the resilience of public finances to various scenarios of global economic development.” He pointed out that the primary risk continues to be the “unfolding of trade wars,” which limit export opportunities for nations, including Russia.
Siluanov remarked that spending must adapt to the “new realities,” stating, “We’ll have to be more modest in our desires and ensure a greater return on every budget ruble.”
In his remarks, he highlighted that oil and gas revenues now represent only a quarter of the federal budget, indicating a notable decrease in reliance on the sector. Preliminary estimates from the Finance Ministry indicate that oil and gas revenues amounted to 2.64 trillion rubles in the first quarter of 2025, a decrease of 9.8% compared to the same period in 2024.
Prime Minister Mikhail Mishustin also spoke at the meeting, stressing the importance of maintaining macroeconomic stability and being prepared to respond to market shifts. “It is important to pay special attention to measures to prevent budget risks,” he pointed out. “We must, of course, be prepared for changes and work out a variety of scenarios based on the current situation.”
Since early April, oil prices have continued to decline, influenced by U.S. trade tariffs and OPEC+’s unexpected decision to increase production. The member countries reached an agreement to raise output by 411,000 barrels per day starting in May, significantly higher than the initially planned increase of 135,000 barrels per day.
On April 9, the price of Russia’s Urals crude dropped below $50 per barrel for the first time since June 2023. Earlier in March, the Finance Ministry had projected that the average oil price for 2025 would be closer to $60 per barrel, a reduction from the budgeted $70. The Economic Development Ministry's forecast is even more conservative, predicting an average of $56 per barrel.
Sophie Wagner contributed to this article for TROIB News
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