The price of Russian oil is rising, the weak ruble has increased budget revenues

The ruble price of Russian Urals oil consolidated above the level of 7.5 thousand rubles. per barrel. In less than four months, the price almost doubled due to both the growth of dollar quotations and the strengthening of the American currency. If ruble prices remain at the current level until the end of the year, the budget will receive an additional approximately 500 billion rubles. oil and gas revenues, experts believe.

The ruble price of Urals has returned to the levels of a year and a half ago. According to Profinance.ru, on September 18, quotes rose to 7.63 thousand rubles. per barrel, 1.1% higher than Friday’s closing value. Even taking into account the correction at the close of trading to 7.58 thousand rubles. the price remained 6.8% higher than the values ​​of a week ago and almost double the values ​​of four months ago. As a result, the average price of Urals since the beginning of the third quarter amounted to 6.6 thousand rubles. per barrel, improving the second quarter result by 43%.

The rise in the ruble price of oil is facilitated by both the rise in dollar prices on the European market and the weakness of the ruble. According to Investing.com, at the beginning of the week the price of Brent on the spot market rose to $94.9 per barrel, the highest since November last year. Over the week, North Sea oil rose in price by 4.6%, and since the beginning of summer – by more than 30%. The price of Russian oil has increased by 63% since the beginning of summer, to $78.9 per barrel, the maximum since July 2022. During this time, the dollar exchange rate in Russia increased by 19%, to 96.5 rubles/$.

The main factor in the growth of oil prices is an increase in demand with a decreasing supply.

In early September, Russia and Saudi Arabia agreed to extend the current production cuts until the end of the year. In total, the market will receive a shortfall of 1.3 million barrels (see “Kommersant” dated September 6). “Given the significant decline in US strategic oil reserves over the past 18 months, the market does not have much reserves in case of a sharp increase in demand or supply disruptions anywhere in the world,” said Ronald Smith, senior analyst at BCS World of Investments.

The global economy is experiencing less pressure from increases in base interest rates for a number of reserve currencies, while the Chinese economy began to show signs of a more dynamic recovery in August, notes Vladimir Evstifeev, head of the analytical department of Zenit Bank. Therefore, further increases in oil prices may continue. Mr. Smith admits that until the end of the year, Brent oil prices will remain in the range of $85–100 per barrel.

Despite high oil prices, experts do not expect a significant strengthening of the ruble. In their forecasts for the fourth quarter, Sovcombank analysts include an average dollar exchange rate of 98 rubles/$. The President of the Russian Federation stated that the authorities see a “restrained return of foreign exchange earnings” from the largest exporters. “Therefore, the authorities will negotiate with business to increase the supply of foreign currency to stabilize the ruble exchange rate, but without sudden movements in the field of currency control measures,” says Mikhail Vasiliev, chief analyst at Sovcombank.

The combination of current high oil prices and a weak ruble has a beneficial effect on budget revenues, notes Mr. Vasiliev.

This year’s budget was drawn up based on the average Urals price of $70.1 per barrel and the average exchange rate of 68.3 rubles/$. The resulting average ruble oil price is 37% lower than the average in the third quarter.

If the current level of ruble prices for Urals oil remains the same until the end of the year, as Vladimir Evstifeev estimates, the volume of additional oil and gas revenues could amount to about 300 billion rubles. per month. “Excluding the accumulated negative additional oil and gas revenues for eight months of the current year, which amount to about 400 billion rubles, the total additional revenues could reach 800 billion rubles. for the remaining four months,” the expert notes.

According to Mikhail Vasiliev’s estimates, if oil prices and the ruble exchange rate remain close to current values, the budget could receive 8.5 trillion rubles this year. oil and gas revenues. This is 0.5 trillion rubles. higher than basic oil and gas revenues of RUB 8 trillion.

Vitaly Gaidaev