Falling Oil Prices Threaten Russia's Economy, Warns Central Bank

Russia's Central Bank Governor Elvira Nabiullina has warned that falling global oil prices, influenced by U.S. President Donald Trump's tariffs, could strain Russia's public finances and pose risks to its economy. With energy revenues constituting about one-third of the annual budget, a decline in oil prices could lead to reduced funding for government initiatives, including military expenditures. As oil prices have dropped significantly, the Russian finance ministry reported a 10% year-on-year decline in oil revenues during the first quarter. Additionally, the Kremlin acknowledged the turbulent state of the global oil market, attributing the instability to U.S. trade policies. Despite the challenges, Russia's financial reserves remain robust, providing some buffer against economic strains. Observers note that while defense spending may be affected, the overall impact may be limited and delayed due to strong reserves.