Oil prices are a crucial indicator of Russia’s economic stability, and the Kremlin is keeping a watchful eye on recent declines. A spokesperson for the Kremlin described the situation surrounding falling oil prices as “very tense.”
Last Friday, oil prices plummeted by 7% due to China increasing tariffs on U.S. goods, further escalating an ongoing trade war. Over the previous week, Brent and WTI crude oil prices fell by 10.9% and 10.6%, respectively.
Sales of oil and natural gas represent approximately a third of Russia’s federal budget revenues. In the first quarter, sales experienced a nearly 10% decline, totaling 2.64 trillion roubles ($30.59 billion), driven by falling global oil prices and a strengthening rouble.
Dmitry Peskov, the Kremlin spokesman, stressed the importance of closely monitoring this turbulent and emotionally charged situation during a daily conference with reporters. Peskov attributed much of this economic instability to U.S. President Donald Trump’s decision to impose tariffs globally.
He noted that the current global economic landscape is fraught with negative expectations, affecting both expert opinions and market sentiment. The downward pressure on oil prices has also been exacerbated by the OPEC+ coalition, which includes the Organization of the Petroleum Exporting Countries and its allies, including Russia, as they advance plans for increased oil production.
The Russian central bank cautioned that the U.S. tariffs could slow global economic growth, resulting in lower oil prices than previously anticipated for several years due to weakened demand. Peskov assured that Russian economic authorities are vigilantly monitoring the situation and taking necessary measures to mitigate the consequences of this international economic turmoil for Russia’s economy.