Russian authorities are assuming an oil price of USD 50 per barrel in the draft federal budget for 2027–2029. President Vladimir Putin announced this at a meeting on economic issues on September 17, according to the Kremlin website.

“As we agreed earlier, we are projecting a price of around USD 50 per barrel. This may look excessively conservative, but it is reliable,” the president emphasized.

Putin also said that the federal budget deficit in 2027 is expected to be around 2% of GDP. This is almost twice the level provided for in the current three-year budget, which assumes a deficit of 1.2% of GDP.

The figure concerns not only the forecast oil price, but also the key parameter of Russia’s fiscal rule — the cut-off price. It currently stands at USD 59 per barrel of Urals crude. The authorities had already discussed lowering it to USD 50 from 2027 back in May 2026, and this agreement has now been confirmed at the highest level.

The fiscal rule works as follows: if the actual oil price exceeds the cut-off price, additional oil and gas revenues are transferred to the National Wealth Fund. If the price falls below that level, the Ministry of Finance sells assets from the fund to compensate for the revenue shortfall.

Putin noted that higher oil and gas revenues would allow the National Wealth Fund to be replenished:

“We expect budget revenues from oil and gas to increase in the coming months as well, which in turn will make it possible to replenish the National Wealth Fund,” he said.

The gap between the forecast and current market conditions is significant. According to trading data for September 17, the price of Russian Urals crude peaked at USD 121.6 per barrel, its highest level since April 2026. Urals traded above North Sea Brent for the first time, with Brent at around USD 104 per barrel. The reason was a premium on Russian crude in Asia following disruptions to supplies from the Persian Gulf. With a cut-off price of USD 50, every dollar above this level is directed to the National Wealth Fund.

For oil and gas companies, the new cut-off price means that the existing tax regime remains unchanged. Lowering the fiscal rule parameter does not affect mineral extraction tax rates or export duties; it only changes how oil and gas revenues are allocated between the federal budget and the National Wealth Fund.