FT: Trump's Tariffs Caused Russian Oil Prices To Collapse

The Russian budget is at risk of losing a trillion rubles.

The new tariff policy of US President Donald Trump, announced on April 2, has caused a drop in the price of Russian oil, which in turn increases pressure on the Kremlin's "military treasury" and could reduce the Russian budget by 2.5%. This will force Moscow to cut non-military spending, increase borrowing on international markets, or tighten taxes for exporting companies.

The Financial Times writes about the impact of Trump's trade war on the Russian economy.

The publication notes that the Russian budget consists of about a third of revenues from oil and gas trade, and if Russian oil prices remain at the current level during 2025, it could decrease by about 2.5%.

Journalists note that after Donald Trump's announcement of new US tariffs, the price of Russia's main export grade, Urals, fell to its lowest level in almost two years. Russia's 2025 budget was calculated based on a Urals price of $69.70 per barrel, while as of April 10, Urals was trading at around $50.

The Kremlin has already used part of its National Welfare Fund to offset the costs of a full-scale invasion of Ukraine, and the fund's reserves are shrinking, the authors of the article note. Russian officials have expressed concern about the drop in oil prices.

“This figure is very important for us in terms of budget revenues... The situation is extremely unstable, tense and emotionally charged,”Kremlin spokesman Dmitry Peskov told journalists.

According to journalists, this indicates that Trump's trade war is indirectly harming the Russian economy. Oil prices continue to fall, despite the 90-day pause in duties announced on April 9.

Sofia Donets, chief economist at Moscow-based T-Investments, expressed the opinion that if Russian oil prices remain at their current level, the Russian budget will lose about a trillion rubles this year, which is 2.5%. At the same time, according to her, GDP growth would slow down by 0.5 percentage points.

At the same time, Janis Kluge, an expert on Russia at the German Institute for International and Security Affairs, notes that it will take several months for the fall in oil prices to affect the Russian budget.

You can support the website Charter97.org

MULTI-CURRENCY ACCOUNT FOR ASSISTANCE:

Bank's name: Bank Millennium S.A.
Address: ul. Stanislawa Zaryna, 2A, 02-593, Warszawa
IBAN: PL97116022020000000216711123
SWIFT: BIGBPLPW
Name of the account holder: Fundacja “KARTA ‘97”
Purpose/title of payment: Donation for statuary aims

You can contact us by the e-mail [email protected]