[How Trump's Tariff War Affects Russia]

On April 7, Важные истории reported that Trump imposed huge tariffs on goods from some countries, but Russia was not among them. However, this does not mean that Russia will be immune to the impact of the tariff war. The damage may not be direct.

The result of Trump's policies is leading to a slowdown in global economic growth. The slower the economic growth, the lower the global demand for oil and other raw materials will be. Oil prices have already fallen. The price of Brent crude has dropped to $65 per barrel, which is the first time since August 2021.

Goldman Sachs Investment Bank has downgraded its oil price forecasts for this year (to $69 per barrel) and next year (to $62 per barrel). Due to the rising risk of an economic recession, they may further downgrade their forecasts. The global production slowdown caused by Trump's tariff policy will suppress demand for fuel and other major Russian export commodities.

For the Russian economy, oil prices are crucial. Oil and gas revenues account for about one-third of the Russian government's budget revenue. Oil companies have become the main source of foreign exchange for Russia. Last year, Russia's oil and gas export revenues reached 242 billion euros, accounting for more than half of the total exports.

Since the outbreak of the war, Russian oil has been sold at a significant discount, with discounts ranging from $10 to $15 per barrel. The average price of Urals crude is $59 per barrel, below the set benchmark price of $60, on which the basic oil and gas revenue for the government budget is calculated. When the oil price is below this benchmark price, the budget deficit will be covered by the National Wealth Fund. If oil prices fall significantly and persistently, these reserve funds will not last long.

The Central Bank warned in a non-public report submitted to the government recently that oil prices may enter a long-term low range like in the 1980s and 1990s. The worst-case scenario in the report is that if Sino-US relations worsen, the world economy experiences de-globalization, and countries begin to localize production, oil prices may drop to $45 per barrel by 2026. Some of these situations are already occurring or heading in that direction. This scenario will lead to a sharp slowdown in the world economy.

Russia may have to offer even larger discounts, exhaust remaining reserve funds, and cut government budget expenditures. The government will try to maintain economic stability, but funds are not as abundant as before.

Source: https://www.toutiao.com/article/1828897211518096/

Disclaimer: The article solely represents the author's个人观点.