Published by Global Banking & Finance Review®
Posted on February 25, 2026
3 min readLast updated: April 2, 2026
Add as preferred source on GoogleRussia plans to lower the oil revenue cut-off and divert more funds into its National Wealth Fund. The move seeks to safeguard reserves and stabilize the rouble amid weaker oil income.
By Darya Korsunskaya and Gleb Bryanski
MOSCOW, Feb 25 (Reuters) - Russia plans to divert more oil revenues into the budget reserve fund, Finance Minister Anton Siluanov said on Wednesday, following President Vladimir Putin's overnight meeting with officials on how to deal with the budget deficit.
Russian revenues from sales of oil, its main export commodity, have fallen because of a growing discount on global markets following U.S. pressure on the biggest buyers of Russian oil.
"Possibly, considering the external conditions, the (budget) indicators might be slightly adjusted, slightly changed," Siluanov told reporters after the government's annual report to parliament.
WILL RUSSIA LOWER ITS CUT-OFF PRICE?
Siluanov said the government planned to decide within the next two weeks whether to lower its cut-off price, or the level above which fiscal revenues from oil sales are diverted into the National Wealth Fund.
Russian oil has consistently traded below that price, which is $59 per barrel for now and set to fall by $1 each year under previously announced plans.
Russia has $56 billion in fiscal reserves that the government can draw on to cover the deficit, but analysts estimate that at the current pace of revenue decline those reserves would be largely depleted within a year. Russian policymakers view a balanced budget as Russia's main shield against Western sanctions.
BEST SOLUTION FOR THE COUNTRY
The Russian budget's oil revenues fell by 24% last year compared to 2024 and have decreased further so far this year. Reuters reported earlier this month that the public deficit could balloon to almost three times the official target of 1.6% of GDP by end-2026
Siluanov did not disclose by how much the government plans to lower the cut-off price, but such a change would automatically imply a cut in spending since more money would flow into the fund.
Analysts from the authoritative Hard Numbers Telegram channel calculated that a $1 decrease in the cut-off price results in a reduction in spending by up to 0.6% of GDP and a corresponding increase in foreign currency purchases in the market.
The sales of foreign currency from the reserve fund on the market have pushed the rouble higher, with the strong exchange rate further denting revenues of the state and exporting companies.
The rouble lost over 1% against China's yuan, the most traded foreign currency in Russia, on Wednesday's announcement.
Prime Minister Mikhail Mishustin told parliament during the presentation of his annual report that there had been a late-night meeting on Tuesday of senior government and central bank officials with Putin in the Kremlin on how to finance the rising budget deficit.
"We discussed a very large number of approaches. I think we spent many, many hours in discussions with the president, all together, figuring out how to choose the best solution for the country," he said.
(Writing by Gleb Bryanski; Editing by Mark Trevelyan, Jan Harvey and Barbara Lewis)
Russia intends to divert more Russian oil revenues into its National Wealth Fund by lowering the fiscal cut-off price to preserve reserves and ease pressure on the currency market.
Lower oil revenues and deeper discounts on Urals crude, driven by sanctions and market pressure, are prompting a shift to protect reserves and reduce budget vulnerability.
A lower cut-off price means more cash flows to the fund and less to the budget, implying tighter spending while authorities seek ways to finance a growing deficit.
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