The downward revision of Russia’s forecasted crude export prices could put more pressure on Russia’s budget.

• Russia’s Economy Ministry downgraded expectations for crude export prices for the next three years to $65/b.
• This was cut from previous estimates of $71.3/b for 2024, $70.1/b in 2025 and $70/b in 2026, Reuters said.
• Russian crude cargoes currently cannot access Western providers at prices above $60/b, known as the G7 price cap.
• Lower oil prices could add additional pressures to Russia’s budget, which saw a shortfall of 0.3% of GDP in Q1, according to Reuters. Nonetheless, the Economy Ministry upgraded 2024 GDP growth forecasts to 2.8% from 2.3%.
• Russia could also lose out in the long term due to lost gas flows to Europe. Gas prices to China – its target market - are expected to be up to 28% lower than to Moscow’s remaining European clients through to 2027.