Russia revises fiscal rule as soaring oil prices reshape budget plans

Russia's Finance Ministry is reviewing its fiscal rule as oil prices climb sharply. While no immediate changes will affect the 2026 budget, officials are planning adjustments for future years. The goal is to secure a balanced federal budget even if oil revenues fall short.

In November 2025, Russia passed a law to lower the fiscal rule's cutoff price from $60 to $55 per barrel by 2030. At the time, crude prices remained stable, with the 2025 annual average hovering between $70 and $77 per barrel. But by March 2026, Brent crude surged to $101.04 amid tensions in the Hormuz Strait and the Iran crisis. In Germany, heating oil prices jumped by 40% since late 2025, exceeding €133 per 100 litres.

The Finance Ministry has now suspended foreign currency and gold transactions on the domestic market while preparing to adjust the base oil price parameter. Officials argue that the current $60 cutoff no longer ensures budget balance, especially with oil and gas revenues underperforming. The proposed changes, aimed at medium- and long-term stability, would take effect from 2027 onward. The ministry insists that tightening the fiscal rule is necessary to balance the budget at lower oil prices. While the 2026 budget remains unchanged, future adjustments will align spending with more conservative revenue forecasts.

The planned revisions come as oil prices spike, but Russia's Finance Ministry remains focused on long-term stability. By lowering the cutoff price to $55 per barrel by 2030, the government aims to prevent budget deficits even if energy markets fluctuate. The changes will not apply until after 2026, giving officials time to assess further economic shifts.