Russia to Cut Non-Sensitive Spending by 10% Despite Oil Windfall from Price Surge

On March 11, 2026, despite a massive energy revenue windfall from surging global oil prices driven by the Middle East conflict, the Russian government is planning to cut all "non-sensitive" spending in federal and regional budgets by 10% to rein in a widening deficit and avoid increased borrowing, with reductions primarily targeting economic and infrastructure projects while sparing defense, military, and social expenditures, according to sources familiar with the situation.

Data shows the federal budget deficit for January-February reached 3.449 trillion rubles, up 1.032 trillion year-on-year—a record high for the first two months—while oil extraction tax revenues are projected to nearly double from about 300 billion rubles in February to 590 billion in March. Economists warn this fiscal tightening suggests Moscow views the current price surge as temporary, and without sustained high prices, those connected to the budget sector or receiving government services face severe challenges ahead.