Russia does not confirm reports of plans to nationalize the energy sector

The Kremlin cannot confirm a report that Russia’s energy minister proposed to Vladimir Putin to nationalize Russia’s energy sector, Kremlin spokesman Dmitry Peskov said on Wednesday.

Reports emerged on Tuesday that Russian Energy Minister Sergei Tsivilev proposed to President Putin that the sector be nationalized, a Telegram channel called EJ reported, citing anonymous sources.

Tsivilev and Putin met on Tuesday, but according to a transcript of the meeting provided by the Kremlin, nationalization was not among the topics discussed.

“No, I can’t confirm that. I have nothing to say about that,” Reuters quoted Kremlin spokesman Peskov as telling reporters during the regular daily news conference on Wednesday when asked about the report.

Russian officials have said many times that there are no plans in the pipeline to nationalize major Russian companies, including in the oil and gas industry.

Oil and gas are a major source of revenue for the Russian budget.

Russia is now bracing for lower oil revenues as a result of lower prices, along with a more relaxed fiscal regime, Bloomberg reported last week, citing a draft three-year budget.

According to the document, Russia’s oil revenues would fall by 14% over the next three years, provided international oil prices remain weak.

For 2025, the document predicts oil revenues of about $120 billion, or 10.94 billion rubles, which would be a 3.3 percent drop from this year. That modest decline would then extend into 2026 and 2027, when oil revenues would fall to $110 billion, according to the government’s current forecast.

Russian oil price projections for budgetary purposes tend to be bearish to minimize the element of surprise in the event of negative price developments, reducing their impact on spending.

Under this approach, Russia’s 2024 budget assumes an average Brent price of $70 per barrel, falling to $69.70 per barrel in 2025, $66 per barrel in 2026 and $65.5 per barrel in 2027 .

By Charles Kennedy for Oilprice.com

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