Russian oil prices have fallen to a two-year low and are already 40% below the budget target.

The Russian economy is showing a decline for the first time since 2022. The price of Russian oil in rubles has dropped below ₽4,000 per barrel for the first time in two years. This is approximately 40% less than what was planned in the Russian federal budget.

Consequently, the average price of Russian Urals and ESPO grades decreased to $48.92 per barrel on May 2. This corresponds to a price of ₽3,987, which is more than 40% below the threshold of ₽6,726 set in the 2025 budget. According to Reuters, this is the lowest figure since May 2023.

World oil prices have fallen by more than 20% since the beginning of April. This decline was influenced by the unpredictable tariff policy enacted by US President Donald Trump, as well as OPEC’s decision to accelerate oil production.

Moreover, the Russian economy may have shrunk by 0.3% in January-March 2025, following growth of 1.3% in October-December 2024. This is the first quarterly decline since the second quarter of 2022. The primary cause is the weakening of industrial production, along with a simultaneous decrease in oil prices.