High oil prices won't save Russia's economy from a slowdown, says Bloomberg
The sharp rise in oil prices due to the escalation in the Middle East is unlikely to significantly improve the economic situation in Russia, which is already showing signs of a slowdown and the risk of a recession.
This is reported by Bloomberg.
According to the publication, Russian leader Vladimir Putin has publicly acknowledged the slowdown in economic growth and demanded explanations from the government and the Central Bank regarding the causes of this trend.
Although rising oil prices are temporarily boosting Russia’s export revenues to levels close to those seen before the full-scale invasion in 2022, this does not offset domestic economic problems.
Analysts note that one of the key reasons is high lending rates, which are holding back investment and business development. At the same time, significant budget expenditures are directed primarily toward the military sector, which does not stimulate civilian production.
Bloomberg estimates that the Russian economy could contract in the first quarter of 2026, which would mark the first such decline in recent years.
The situation is further complicated by the fact that even potential additional oil revenues are partially directed to the National Welfare Fund rather than directly into the economy.
Experts emphasize that even with high oil prices, the structural problems of the Russian economy—declining production, investment risks, and inflationary pressure—remain decisive and cannot be offset by export revenues alone.
On Wednesday, April 22, oil prices on global markets have remained relatively stable.
Energy prices do not reflect the full extent of the supply cuts, analysts note.
Oil prices fell sharply amid news regarding the U.S. and Iran.
