Oil price cap may widen Russia's 2023 budget deficit, says finance minister

, imposed on December 5 by the Group of Seven, European Union, and Australia with the aim of limiting Russia’s ability to fund the military campaign, could indeed hit state finances.

President Vladimir Putin had on December 9 called the price cap “stupid,” saying the $60 ceiling corresponded to the price at which Russia was already selling, and adding, “Don’t worry about the budget.” Should volumes shrink, Siluanov said Russia has two sources of additional funding: the National Wealth Fund , which accumulates state reserves, and loans.

“Since the start of the special military operation, the macroeconomic conditions have changed, inflation has risen, and a large volume of resources has been required to support families,” Siluanov said. It has relaxed restrictions on issuing bonds with floating-rate coupons, which have performed much of the heavy lifting during its recent borrowing spree, but has no specific target for their share, currently at 38%, in the debt portfolio.

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