Oil rally may be just what Putin needs to keep Russians happy

Rising oil prices and a weak ruble could provide the Kremlin with as much as $33 billion in extra cash for social spending this year, giving Vladimir Putin the financial wherewithal to help head off growing public discontent.

Thanks to a 25% price surge this year, Russia now receives more rubles per barrel of Brent crude than any time since mid-2019. If oil remains high, the windfall would be enough to allow the budget to receive an extra 2.3% of gross domestic product, according to Sova Capital in Moscow.

“It’s very important to stimulate business and consumers whose disposable incomes were down last year,” said Artem Zaigrin, chief economist at Sova Capital in Moscow. “Without additional funding, there are risks that the economic recovery will fade.”