Russian authorities closely monitoring oil price slump, Kremlin spokesman says

Oil prices are a very important indicator of Russia’s financial health, and the economic authorities are closely monitoring the situation as prices fall. Kremlin spokesman Dmitry Peskov said this today. He described the state of the global economy as highly tense, Reuters reported. Oil prices plunged seven percent on Friday and continued to fall today. A barrel of US light crude, West Texas Intermediate (WTI), fell below $60 for the first time in four years.

Prices of oil and other commodities are falling around the world alongside share prices. Analysts say this is a reaction to the tariffs introduced by the United States. China also surprisingly announced tariffs on imports of goods from the US last week. Economists are now predicting an overall economic downturn that will reduce demand for commodities, including oil.

Sales of oil and natural gas account for about one-third of revenues in Russia’s federal budget. However, analysts say the escalation of trade disputes is increasing the likelihood of a recession in the US and slower growth in other countries. North Sea Brent and WTI prices fell by more than ten percent last week, with Brent trading at around $63 a barrel on Monday morning.

Russia’s revenues from oil and gas sales fell by almost ten percent in the first quarter to 2.64 trillion rubles (CZK 705 billion). The main causes were not only the decline in prices for these commodities on global markets, but also the stronger ruble. Commodity revenues are also important to Russia because Moscow is spending heavily on the war in Ukraine, which it launched in February 2022.

„Of course, we are following the situation very closely. It can now be characterized as exceptionally turbulent, tense and emotionally charged,“ Peskov said on a daily conference call with journalists.

He linked the turbulence to US President Donald Trump’s decision to impose tariffs on countries around the world.

„The situation in the global economy… is indeed highly tense and full of negative expectations, both in the professional community and among market players,“ Peskov said.

The OPEC+ group, which brings together the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, also contributed to the decline in oil prices last week with its announcement. Eight countries, including Russia, agreed to accelerate oil production increases.

Russia’s central bank said last Wednesday that higher US tariffs could slow the global economy and that oil prices could remain below expectations for several years as a result of weaker global demand. „Our economic authorities are monitoring this situation very closely and, of course, are doing and will do everything necessary to minimize the consequences of this international economic storm for our economy,“ Peskov said.