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Russia May Require to Use Reserves If Oil Prices Remain at $30 Per Barrel

© AFP 2021 / FABIO BUCCIARELLISmoke is seen rising from the the burning leftovers of an oil refinery
Smoke is seen rising from the the burning leftovers of an oil refinery - Sputnik International
According to Russia's finance minister, Moscow may resort to using reserves should the oil prices remain at the level of $30 per barrel.

MOSCOW (Sputnik) — A prolonged period of oil prices remaining around the $30 per barrel mark may force Russia to spend some of its financial reserves, Russia's Finance Minister Anton Siluanov said Saturday.

"If prices remain at the level of $30 per barrel, then, possibly, we will have to turn to using reserves, but we have resolved to minimize turning to such solutions," Siluanov told reporters.

Oil prices have fluctuated around $35 per barrel since late January, after rebounding from the January 20 price of just over $28 per barrel, which was the lowest level since 2003.

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A price of $30 per barrel leaves Russia with a revenue shortfall of some 2 to 2.5 trillion rubles ($26-32 billion), the minister added.

In case of the optimistic scenario of oil prices rebounding to around $40 per barrel, Russia will need to re-balance its budget in order to keep its budget deficit below 3 percent, Siluanov said, stressing that the measure will involve budget cuts above the current reduction of 10 percent.

Despite the cuts, Russia is set to increase outlays on pensions, supporting the ruble and on industry subsidies, the minister added.

Brent crude prices plunged from $115 per barrel to $48.5 per barrel between June 2014 and January 2015, causing significant financial problems for many oil-exporting countries. On Saturday, Brent crude fall over one percent to almost $34 per barrel in another slump following the post-January 20 rally.

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