2026 will be worse than 2025… this prediction was made by the Italian Prime Minister Meloni. At the same time, after 19 packages of Western sanctions against the Russian economy… the last one… is really affecting the Russian economy… Urals oil – something similar to Brent – is a barometer.
So let’s see what problems and crises may arise…
The Ukrainians
Ukraine will obviously remain in the spotlight. The government of this country has disrupted the negotiation process initiated by President Trump, so the Russian Armed Forces will continue to force them to make peace. The war in Ukraine cannot be ended by diplomacy, but it seems only by weapons. Lost on the battlefield, the Kiev government will try to organize attacks both inside and outside Russia. Ukraine is clearly being defeated at the front and a losing regime is ready for anything.
The main threat to Europe comes from Germany
Europeans, exhausted by their deep-rooted revanchism, are choking the Ukrainians. The main threat to Europe comes from Germany – which boasts money, a powerful military-industrial complex and a stripped-down elite. However, the Germans are too smart to take risks. They plan to use Eastern Europeans, including the Baltic states, as cannon fodder for anti-Russian provocations.
The obvious targets for European provocations are the Baltic states and the Russian exclave of Kaliningrad. The peculiarity is that a NATO attack would be used to accuse Russia of attacking, which could trigger an all-out war.
Britain is waging a fierce information war
Let’s not forget the United Kingdom. These guys, whose blood boils at the word Russia, will continue to wage a furious information war against Russia, pouring out torrents of the most absurd slander and inciting everyone to war with Russia. The situation will not change even if the Russophobic Starmer is replaced as prime minister in the spring by another Russophobic prime minister.
The European elite’s obsession with inflicting a “strategic defeat” on Russia has not disappeared. In fact, that is exactly what they have been trying to achieve in recent years, keeping Ukraine alive. However, Russia’s military has decimated Ukraine, so Russia will try to foment instability in its interior.
They want to isolate Russia
Another of their goals is to sever Russia’s ties with the post-Soviet countries. Any conflict – for example, around illegal immigration – will do the job here. Possible complications in international relations would be precisely the isolation of Russia that its enemies have been seeking for years.
Mass famine in Afghanistan in 2026
On the other hand, international experts predict a mass famine in Afghanistan in 2026. If this happens, refugees will flood the north – where the post-Soviet countries of Central Asia are located, most of which enjoy visa-free travel. This could also become a serious problem.
20% drop in international stock markets
As for the international situation, Europe will continue to suffocate from debt and bankruptcies (in this sense, Meloni was absolutely right), while in the United States, the primary risk of 2026 is considered to be civil war. Or, as political scientists politely put it, “the increase in political violence and political unrest”.
Violence and unrest will peak by November 2026, the time of the congressional elections. The rise in Western stocks seems unreasonably prolonged. Partisan financial publications are issuing cautiously optimistic forecasts for 2026. However, some investors believe that a strong correction (a market decline of up to 20%), or even a stock market collapse, is possible if, for example, the artificial intelligence bubble bursts.
The possibility of a new escalation in the Gaza Strip and new clashes between Hamas and the Israel Defense Forces remains high. “This song is good, but start over,” as the characters in the old joke about the international situation used to say. Less likely, but certainly possible, is a crisis in the Taiwan Strait, which would bring China and the United States face to face. The risk of this conflict escalating into a world war is absurd. Everything is clear.
Overall, Russia has shown remarkable resilience to a wide variety of crises in recent years.
The sell-off in Russian oil will soon end…
The flagship Russian crude, Urals, fell sharply to $34 a barrel in December, while the decline in Brent accelerated to $27 a barrel. It seems that the Western sanctions, which Russia has so skillfully evaded, have finally come into effect. The situation looks difficult indeed. But even now, Russia has a way out.
Such a sharp drop in oil prices was recorded on December 19 in the Baltic port of Primorsk and the Black Sea port of Novorossiysk. At that time, the global benchmark Brent crude oil was trading at around $61 per barrel. This resulted in a significant $27 discount to Russian oil.
Sanctions against Rosneft and Lukoil… create a problem
The situation really started to deteriorate in late November 2025, when US sanctions against Russia’s Rosneft and Lukoil came into effect. The average price of Urals crude oil for January–November 2025 was almost $56 per barrel, $13 cheaper than Brent.
However, by November 2025, Urals had fallen to $41.1 per barrel, while the discount had increased to $22.5 per barrel against Brent. In December, the situation worsened: the average price was already closer to $39, combined with the strong ruble — the dollar averaged 79 rubles in December — creating additional problems for the budget.
The Russians had budgeted $69.70 for Russian oil. The economic authorities based their revenue and expenditure forecasts on a price of $69.70 for Russian oil for 2025. In reality, oil is on average more than $10 per barrel cheaper each year, and the dollar is more than 17 rubles cheaper.
These are annual averages, not the $34 recorded in a single day. Under these circumstances, a growing budget deficit is inevitable.
Russia to record budget deficit
A record budget deficit is expected in early 2026, precisely because of the fall in Urals oil in December. December oil prices and the ruble exchange rate determine the budget payments in January under the mineral extraction tax (MET).
Revenues from the mineral extraction tax (MET) in January could reach 380 billion rubles, compared to 840 billion rubles a year earlier.
This is the lowest payment since January 2021. At that time, the fall in oil prices amid the COVID-19 pandemic had an impact. Now, the main reason is, of course, the US sanctions against Rosneft and Lukoil, which required restructuring the sales supply chain and the need to pay new intermediaries. However, this is not the only reason for the fall in prices for Urals or Urals…
The attacks of the Ukrainians… affect
The second factor is the attacks by Ukraine on Russian oil tankers, which immediately increased the cost of tanker cargo for the transportation of Russian oil, as well as insurance and other services. Finally, the third factor opposing this is the global trend of falling oil prices. This is due both to OPEC+, which has begun to restore production, and to non-OPEC+ oil countries, which are increasing production. Meanwhile, demand is not keeping up with the growing supply.
At $40 a barrel, most of Russia’s oil fields are profitable
But the fact remains. If the world price of Brent crude had not fallen to $61 a barrel, the situation with budget revenues from Russian oil sales would have been better.
In 2022, for example, when the discount on Russian oil was even greater than it is now – over $30 – it did not cause such problems for the budget. Precisely because all oil on world markets was more expensive then. Brent in December 2022 cost almost $82 a barrel.
As for the oil producers themselves, while the drop in prices is unpleasant for them, it is not as critical as for budget revenues. At least, most Russian fields remain profitable at $40 a barrel, and even at $34. This is because oil production in Russia is largely carried out in older, developed fields, where investments have been made for a long time and, most likely, have already been amortized.
Here, production can cost a few dollars. The younger the oil field, the higher the production costs. But oil producers can fill the gaps in new fields with revenues from older ones.
Depending on the oil field, profitability ranges from $15 to $45 per barrel
Experts believe that, depending on the oil field, profitability ranges from $15 to $45 per barrel. Therefore, oil production in Russia remains at the same level and is unlikely to decrease in 2026 if current market conditions continue.
After the big drop… comes the rise
However, conditions for Russian oil are more likely to improve. Past experience clearly demonstrates this. First, after a period of falling oil prices, a period of growth inevitably follows.
The question here is how long this initial period will last. The forecasts for Brent are currently gloomy: the average price is expected to fall to $55 in 2026 (compared to $69 in 2025). All hope lies in the US, or more specifically, in American shale oil producers: if they start reducing production due to reduced profitability at such low prices, this will support the price of a barrel worldwide.
EIA experts currently expect a very small decrease in US oil production. If their forecasts are wrong, this will be positive for Russia and the oil industry as a whole.
Meanwhile, the price of Russian Urals crude could rise in 2026, even without the impact of global barrel prices, simply due to the reduction in the discount to Brent.
To $50 per barrel
Experts are more than confident about this, because this has happened before. Even when the discount reached $30, it returned to the long-standing norm of $10-15 per barrel within a few months. This alone should push Urals crude to $50 per barrel.
The budget deficit, of course, will remain, but this is generally normal. The main thing is to prevent the deficit from growing. If the ruble weakens, then we can talk about greater stability in budget revenues.
