The loading price of Russian oil in late December and early January fell to multi-year lows. While a barrel of Urals shipped from Baltic and Black Sea ports fetched about $45 in November, it dropped to $40 in December and then slid to $34–36. By mid-January, prices had recovered to $40–43, but Novaya Gazeta Europe says that still falls far short of what the budget needs.
The outlet links the decline to new US sanctions imposed in October on Rosneft and Lukoil, as well as to transport risks. It reports that Ukrainian strikes on ports and tankers in the Black Sea, including an attack near Novorossiysk on January 13, have raised insurance premiums and wartime freight costs. Traders are passing those costs on to producers, putting additional pressure on the Urals price.
At current prices, some producers are close to operating at a loss. Out of $35–45 per barrel, companies still have to pay the mineral extraction tax, around $5 for transportation through Transneft, and average production costs of about $10. In practice, this means that mainly producers benefiting from tax breaks can still make money.
Russia’s 2026 budget is based on 8.9 trillion rubles in oil and gas revenue, which would require Urals to average about $59 per barrel. But with the current $20–25 discount to Brent and continued military risks in the Black Sea, such a level appears hard to achieve. An economist at a foreign bank quoted by the outlet estimated that the deficit could widen by 1.5–3 trillion rubles, depending on oil prices and the ruble exchange rate.
If the dollar trades at 92.2 rubles, as assumed in the budget, losses would amount to roughly 1.5–2 trillion rubles. If the ruble remains stronger, around 80 to the dollar, missing revenue could reach 3 trillion rubles, or 34% of planned oil and gas income. At the same time, the publication’s sources do not expect the authorities to cut defense spending, which is planned at 12 trillion rubles.
Economists named three ways to cover the gap: more borrowing, use of the liquid part of the National Wealth Fund, and tax increases. They say the fund now holds a little over 4 trillion rubles in liquid assets, while larger domestic borrowing is already driving up debt-servicing costs. As a result, Novaya Gazeta Europe’s sources believe the authorities may either continue raising VAT and personal income tax burdens or increase tax pressure on the oil and gas sector, although the companies themselves are likely to lobby for additional relief.