I'm John Bachelor. The Russian economy under sanctions. I welcome Michael Bernstom of the Hoover

Institution. My guide on these matters is many years. Michael, a very good evening to you. I learned

from Bloomberg in these last days that the Russian decision makers have set the 2026 budget,

assuming an 8.9 trillion rubles from gas and oil revenues,

a euroless crude price of $59 per barrel, that's what they need, and an exchange rate of 92.2

rubles per dollar.

I believe you indicate to me that these are wildly out-of-reach numbers.

Good evening to you, Michael.

Good evening to you. This is all outdated before even when they announced it, because all

these numbers have nothing to do with the real world. The European Union, as of February the

first several days ago, imposed the new price

cap on the Russian oil, seaborne Russian oil, $44.10 per barrel. But in the real world, it doesn't

matter because Russian oil sells at $37.30 cents per barrel. Now, after the oil prices, world oil prices, all went up by $5 to $6 in the last couple of weeks because of the situation between the United States and Iran. Before that, Russian oil sold for $34 per barrel.

So generally, the estimate, the budget that thinks that somehow they will sell at $59 per barrel

is just not even a fantasy.

It's a dream, it's a wishful thinking.

It's not realistic.

But the problem is the actual numbers are that in January

2026, a preliminary estimate is that budget revenues from oil and gas are down by 46 to 48%

compared with January 2025 a year ago, a year ago.

And for 2026, they have new estimates of the budget deficit

because the official plan, the official target is 1.6% of GDP,

...