MOSCOW, March 11 (Reuters) - The price of Russian oil used for taxation has exceeded the budget target for the first time since January 2025 because of the rise in global prices caused by the Iran war
Russian Oil Pricing for Taxation Surpasses Budget Amid Global Price Surge
Impact of Global Events on Russian Oil Revenue and Budget
Russian Oil Prices Exceed Budget Targets
MOSCOW, March 11 (Reuters) - The price of Russian oil used for taxation has exceeded the budget target for the first time since January 2025 because of the rise in global prices caused by the Iran war, Reuters calculations showed on Wednesday.
Military Spending and Budget Deficit
Russia has increased military spending since the start of its war in Ukraine in 2022, increasing its budget deficit, which was 3.45 trillion roubles ($43.70 billion) - or 1.5% of gross domestic product - in January-February.
Effects of the Iran War on Oil Demand
The Iran war, involving U.S. and Israeli strikes on Iran and Iranian strikes against Israel, U.S. military bases and Gulf states, has fuelled a significant rise in demand for Russian oil and gas, boosting exports which had been hit by sanctions linked to the war in Ukraine.
Urals Oil Premium and Export Boost
Underlining the boost to Russian revenue, traders said on Friday that Russian flagship Urals oil delivered to Indian ports was for the first time selling at a premium to Brent crude, the international benchmark.
Taxation Price Calculations and Budget Assumptions
According to Reuters calculations, based on data from industry sources, the Russian oil price used for taxation reached 6,105 roubles per barrel on Monday, up 82% from February 27, a day before the United States and Israel started their military campaign against Iran.
That's more than the price of 5,440 roubles per barrel, or $59 per barrel at the rouble rate of 92.2 per U.S. dollar, assumed in the 2026 federal budget.
Short-Lived Price Surge?
Russian oil trading above the budget targets could be short-lived because of a decline in the global oil price and a strong rouble.
Market Reactions and Oil Stockpile Release
Russian oil was trading at around $62 per barrel on Wednesday, easing after reports of a possible release of oil stockpiles to mitigate the oil deficit caused by a blockage of the Strait of Hormuz, an important route for global oil flows.
Federal Budget Challenges
Underscoring the federal budget problems, Russian state oil and gas revenues fell by 44% in February to 432.3 billion roubles from the same month a year ago, according to finance ministry data, because of lower oil prices and a stronger rouble.
Exchange Rate Context
($1 = 79.0000 roubles)
(Reporting by Reuters, Editing by Guy Faulconbridge and Timothy Heritage)
