Russia’s 2027 budget tightens the screws: tax hikes to fund the war—while Brent forecasts slide

Russia’s economic and finance officials are laying out a new fiscal and energy baseline for the coming years, with the state projecting a softer oil price path and a tighter budget structure. On September 24, 2026, TASS reported that Economic Development Minister Maxim Reshetnikov forecast Brent at $73 per barrel in 2027, easing to $66 by 2029, while arguing that external assumptions remain “conservative.” The same day, TASS also cited Finance Minister Anton Siluanov saying the non-oil and gas deficit would narrow to about 5% of GDP in the 2027 budget, and that non-oil-and-gas revenues should consistently exceed 80% of total revenues. Separately, The Moscow Times reported that the 2027 budget draft includes fresh tax hikes intended to cover a “war deficit,” coming only weeks after the Kremlin said officials were not discussing further increases. Strategically, the cluster signals a dual-track approach: Russia is preparing for a lower long-run oil price while simultaneously rebalancing fiscal dependence away from hydrocarbons and toward broader tax extraction. The political economy is clear—funding security priorities and war-related spending is being treated as non-negotiable, even as officials try to frame the plan as sustainable and internally financed. The Kremlin’s earlier messaging that no additional tax hikes were being considered, followed by a draft that proposes new increases, suggests either a rapid shift in budget arithmetic or a deliberate attempt to manage expectations before formalizing measures. Prime Minister Mikhail Mishustin’s reported emphasis on social obligations, healthcare, education, and “ensuring the security of the country” indicates that the state is trying to preserve domestic legitimacy while tightening the fiscal channel that ultimately supports defense and security spending. For markets, the implications are primarily fiscal and energy-linked rather than a direct supply shock. A Brent assumption drifting from $73 in 2027 to $66 by 2029 implies less revenue cushion from exports, which increases the probability of continued fiscal consolidation measures and higher domestic tax burden; this can affect Russian sovereign risk premia and the pricing of Russian credit risk. The non-oil-and-gas revenue target—non-oil-and-gas revenues exceeding 80% of total revenues—points to greater reliance on domestic taxation and regulation, which can influence Russian equities tied to consumption, banking, and state-linked sectors through demand and compliance costs. While the articles do not name specific instruments, the direction is consistent with a higher fiscal drag and potentially steadier policy support for strategic sectors, which can feed into RUB sentiment and regional EM risk appetite. What to watch next is whether the final 2027 budget law locks in the proposed tax hikes and how the government reconciles the “war deficit” with the stated 5% non-oil-and-gas deficit target. Key indicators include the final revenue composition in the enacted budget, any amendments to tax codes or enforcement timelines, and updated oil-price assumptions in parliamentary debates. Investors should also monitor whether social spending priorities—healthcare, education, and family support—are protected in nominal terms or trimmed in real terms as the security agenda competes for resources. A practical trigger for escalation would be further revisions to fiscal targets if oil prices or export volumes underperform the $73/$66 path, or if additional “security” allocations are announced outside the budget cycle.

Geopolitical Implications

• 01

  Fiscal tightening and war-deficit financing indicate Russia is institutionalizing sustained security spending rather than treating it as temporary.

• 02

  Shifting revenue composition toward non-oil sources suggests resilience planning against sanctions-linked export constraints and oil-price volatility.

• 03

  The gap between earlier Kremlin messaging and the reported tax-hike draft points to either rapid budget re-optimization or expectation management ahead of formal policy adoption.

• 04

  Maintaining social spending priorities alongside security allocations is aimed at preserving domestic legitimacy, which can affect Russia’s negotiating posture and external leverage.

Key Signals

• —Final 2027 budget law text: enacted tax changes, effective dates, and enforcement intensity.
• —Updated oil-price assumptions in parliamentary sessions and any revisions to the $73/$66 path.
• —Budget execution data: whether the non-oil-and-gas deficit target (~5% of GDP) is met in early quarters.
• —RUB and sovereign spread reaction around budget approval milestones and tax implementation deadlines.