Russia is considering changing its key budget-building mechanism in response to sliding oil revenue, in a sign the Kremlin expects crude prices will remain lower for longer while the war in Ukraine continues to drain state coffers.
The government may reduce the threshold of its so-called budget rule to around $50 per barrel from $60 currently from next year if crude prices remain low, according to a person familiar with the matter, asking not to be identified because the considerations aren't public. Discussions are at an early stage and a key challenge for officials is that it would require cuts in state spending while the war continues absorbing resources, according to that person.
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