Russia to plan 2026 budget revenues based on oil price of $59/barrel - Siluanov
MOSCOW. Sept 9 (Interfax) - Russia's Finance Ministry is factoring a forecast average price of $59 per barrel for Urals crude into the drafting of the federal budget for 2026 and projections for its oil and gas revenues, Finance Minister Anton Siluanov said in an interview with Radio RBC.
"In fact, I believe we have approached the forecasting of energy resource prices, primarily oil, in a very balanced manner. For the next year, Urals oil and the budget revenues from it are based on $59 per barrel," Siluanov said.
"We see that analysts are saying that in the medium term Brent will cost around $60-$65 per barrel. We currently have discounts against Brent crude, so it seems to me that the oil price forecast made by the economy ministry is fairly balanced - $59, around $60 in subsequent years, [this] allows us to feel sufficiently confident in the forecast for oil and gas revenues," Siluanov said.
Previously, in the budget plan for 2025-2026, the oil price factored in for next year was $66 per barrel.
"If such a price - $60-$65, if we take Brent - persists in the medium term, then shale oil production projects will become less profitable and financing for such projects will be in question. And we see that shale drilling has begun to gradually decline," he said.
Commenting on the preparation of the draft federal budget for the next three-year period, Siluanov said that the Finance Ministry will always advocate for the budget to be drawn up according to the principles and rules prescribed by law, meaning adherence to budget rules. "This gives stability to the budget structure, independence of the budget from external factors, be it energy prices or sanctions. We must create such a budget, such a reinforced concrete structure, to minimize all the restrictions that they are trying to be imposed on our country," he said.
Expenditure optimization remains a constant process that is "not always perceived positively by our colleagues in the government," Siluanov said. "Without optimization, without annual structuring and prioritization, I think we would not have succeeded, because new tasks arise every year, new priorities emerge every year, and every year we review everything we have at our disposal. Sometimes we have to give something up, sometimes we have to optimize - let's direct part of your budgets to new tasks," he said.
"It is impossible to always say, let's increase the revenue base, let's increase borrowing. We must always work with the amount of funds available in the budget. This is not easy, everyone says it's difficult, but it is necessary," he said.
When preparing a new draft budget, the amount of requests from sectoral ministries usually amounts to three times the budget, he said. "The Finance Ministry, in discussions with sectoral departments, finds the most balanced and verified solutions. Finding the very core that should remain in the state's financial plan is an art," he said.
President Vladimir Putin previously said that it is necessary to work on the revenue side of the budget, not by increasing taxes but by improving production efficiency. "We need to increase labor productivity, introduce the latest technologies, and better organize production. Here we have something to work on, and the reserves are countless, meaning there are great opportunities here," Putin said.
Answering a question about whether the Finance Ministry considers the possible lifting of any sanctions against Russia when preparing the budget, Siluanov said, "We form the budget based on current conditions. Will it happen or not, why should we guess? We need to ensure that all budget obligations are fulfilled unconditionally. If it gets better - good, we will spend additional money on the tasks at hand. But what if it doesn't? Therefore, the budget should always be formed based on balanced, conservative approaches. So we cannot afford to indulge in excessive optimism."
The current budget law plans revenues for 2026 at 41.841 trillion rubles (18.1% of GDP), for 2027 - at 43.154 trillion rubles (17.4% of GDP), including oil and gas revenues of 10.564 trillion rubles (4.6% of GDP) and 9.766 trillion rubles (3.9% of GDP), and non-oil and gas revenues of 31.277 trillion rubles (13.6% of GDP) and 33.388 trillion rubles (13.4% of GDP). Expenditures in 2026 are planned at 44.022 trillion rubles (19.1% of GDP), and in 2027 - at 45.916 trillion rubles (18.5% of GDP). The deficit in 2026 is expected to be 2.181 trillion rubles (0.9% of GDP), in 2027 - 2.761 trillion rubles (1.1% of GDP).
