According to insiders, as early as 2026, the aggressor country Russia may change the main budget rule for financing the National Welfare Fund (NWF), from which it draws funds for waging war against Ukraine. What is important to understand is that in this case, it will be about changing the mechanism of deductions for Russian oil companies.
Points of attention
- Donald Trump believes that lower oil prices could escalate pressure on Russia, potentially impacting the war's duration and outcome.
- The likelihood of Russia adjusting budget rules to sustain war efforts signifies financial limitations in the Kremlin's strategic planning amid geopolitical tensions.
The Kremlin has new problems with war spending
Putin's team is currently discussing a scenario according to which, as early as 2026, oil companies will be obliged to transfer their surplus revenues to the National Welfare Fund.
It is worth noting that this will happen if the price of a barrel of oil reaches $50 or higher, provided that the cost of "black gold" on the world market remains low.
What is important to understand is that as of today, companies are required to share with the Fund if the price of oil exceeds $60 per barrel.
Discussions on this topic in the Kremlin have only just begun. Putin's team is preparing for the fact that world oil prices will remain lower than expected.
As a result, if hostilities with Ukraine continue, the Russian Federation will likely have to cut government spending to finance the war.
By the way, according to US President Donald Trump, the decline in oil prices is increasing pressure on the aggressor country Russia, and also increases the likelihood of the war ending.
