Russia economy in meltdown as Putin is dealt huge blow

 Russia's economy has suffered another hit as oil price falls threaten to upend Vladimir Putin's Ukraine war effort. The country's economy ministry has slashed its forecast for the average price of Brent crude this year by almost 17% from its estimate last September, according to the Interfax news agency.

The Russian government revised its forecast for 2025 for the international benchmark down from $81.7 per barrel to $68, according to Interfax. For Russia's main Urals blend, the price has dropped from $69.7 per barrel to $56 per barrel. Money made from oil and gas matters a lot to the Russian economy, as it makes up about a third of the country's budget revenues.

A decline in revenue puts pressure on Russia's war chest, with the Kremlin increasing spending in January and February to fund its costly war on Ukraine.

The country's Urals blend slumped to $52.76 per barrel two weeks ago in the wake of US President Donald Trump's announcement of sweeping tariffs on foreign goods entering the United States.

Mr Trump's levies spooked markets with fears of a drop in global demand, sending oil prices south.

Russia's central bank warned earlier this month that oil prices could be below forecast for a number of years because of lower global demand.

Despite the drop in Russia's Urals blend, Putin's economy ministry said it doesn't see major risks of recession from Mr Trump's trade war.

The representative, quoted by Russia's TASS news agency, said: "We have lowered the expected Brent price for this year to $68 per barrel. We believe that this is a fairly conservative estimate, but... it is realistic."

But a sustained lowering of crude prices would force Russia to cut spending, increase borrowing or draw on its reserves.

Interfax reported a ministry representative as saying the world is wider than the United States and some flows would be redirected.

The ministry maintained its growth forecast for Russia at 2.5%, but increased its inflation estimate from 4.5% to 7.6%.

However, analysts at JP Morgan have told clients the "tsunami" generated by Mr Trump's tariffs is "unlikely to leave Russia unscathed".

Russia was missing from Mr Trump's tariffs target list because of existing sanctions imposed in response to Putin's full-scale invasion of Ukraine in February 2022.

But risks remain for Russia as a result of the tariffs, with demand for its energy resources likely to fall in the event of a stalling in global trade.