The industry is both the engine of the Kremlin’s economy and its primary source of vulnerability; oil and gas make up around a third of state-budget revenues.
Global crude prices slumped this month and remain volatile after tariff-fueled recession fears gripped the market. Russia’s benchmark Urals blend is hovering under $55 a barrel, far below the target in this year’s budget of around $70. Analysts say that if prices remain low, the Russian economy will face a hard landing, in which case they project the budget deficit would nearly double this year.
The downturn comes at a precarious moment for Moscow: Its economy was already slowing before the collapse in the price of oil, and the Kremlin is engaged in negotiations with the U.S. over a cease-fire in Ukraine. Moscow has been slow-walking the peace talks,…
