Russian Oil Price Exceeds Budget Target

The price of Russian oil used for taxation surpassed the federal budget target on Monday, March 10, 2026, for the first time since January 2025, providing relief to Russia's state coffers. This increase, calculated by Reuters, is a direct consequence of surging global oil prices driven by the ongoing Iran war, which involves military actions by the U.S. and Israel against Iran, and Iranian retaliatory strikes.

On Monday, the Russian oil price for taxation reached 6,105 roubles per barrel, an 82% increase from February 27, the day before the U.S. and Israeli military campaign against Iran commenced. This figure exceeds the 2026 federal budget's assumed price of 5,440 roubles per barrel, or $59 per barrel at a rate of 92.2 roubles per U.S. dollar. The conflict has also boosted demand for Russian oil and gas, increasing exports previously affected by Ukraine war-related sanctions.

Despite this recent surge, the sustainability of Russian oil trading above budget targets remains uncertain due to potential declines in global oil prices and a strengthening rouble. On Wednesday, Russian oil traded at approximately $62 per barrel, easing after reports of a possible release of oil stockpiles to mitigate supply disruptions from the Strait of Hormuz. Russia's federal budget faced a deficit of 3.45 trillion roubles ($43.70 billion), or 1.5% of GDP, in January-February, with oil and gas revenues falling 44% in February year-on-year.