Economy Minister Alexei Ulyukayev said Friday that the government would cut its oil price forecast for 2015, as oil prices continued their slide after OPEC’s decision not to cut output; but he declined to give a number.
The oil price has slumped from nearly $115 per barrel in June to just above $70 now. Russia needs the oil price to be around $100 per barrel to balance its budget.
“This would be downward [the forecast adjustment,] of course. I won’t tell you by how much,” Ulyukayev said.
Russia’s government has forecast oil at $100 per barrel for its 2015-2017 budget, down from an estimate for an average of $105 this year.
Finance Minister Anton Siluanov said Monday that lower oil prices and Western financial sanctions imposed over the Ukraine crisis would cost Russia around $130-140 billion a year, equivalent to around 7 percent of its economy.
He said Russia now sees an average oil price of around $80-90 per barrel in the medium- and possibly in the long-term.
Oil prices dived after the Organization of the Petroleum Exporting Countries decided on Thursday against cutting output despite a huge oversupply in world markets.
Ulyukayev said OPEC’s decision not to cut oil production had been expected.