Tumbling oil prices could force Russia to revise its 2016 budget, Prime Minister Dmitry Medvedev has warned.
He said that the country must be prepared for a “worst-case” economic scenario if the price continued to fall.
Oil was trading at less than $32 a barrel on Wednesday and has fallen by 70% in the past 15 months.
Taxes from oil and gas generates about half the Russian government’s revenue.
The 2016 federal budget that was approved in October was based on an oil price of $50 a barrel in 2016 – a figure President Vladimir Putin has since described as “unrealistic”.
Government departments have been ordered to cut spending by 10%, repeating a policy imposed in 2015, Reuters reported.
Pensions and pay for government workers will be protected from the cuts, which could save as much as 700bn roubles (£6.3bn; $9.1bn).
Finance minister Anton Siluanov said that the Russian budget could only be balanced at an oil price of $82 a barrel.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.