But if oil falls below $30 for an extended period, then all bets are off and Russia’s economy will be in for a prolonged recession.


The investment research arm of Sberbank, Russia’s largest lender, warned that if oil does average under a $30 per barrel, then Russia’s budget deficit easily widens to around 3.5 trillion to 3.9 trillion rubles, or around $48.7 billion. Government expenditures are budgeted at around 16 trillion rubles. In a sub-30 oil scenario, the Russian government will be forced to cut its budget by 10% in order to reduce the deficit, according to Sberbank CIB.


Russia’s federal government remains highly solvent. The country is run by a bend-don’t-break mentality in the economic policy centers. Western sanctions have helped prolong a recession. Oil just made it worse.


Last year, Russian government accounts declined by around 900 billion rubles. But the Finance Ministry held 250 billion rubles on deposits with banks as of January 1, as well as some more cash not spent in 2015.


Investors have told FORBES that lifting of sanctions on Russian energy and finance will be a boon for sentiment, but won’t translate into economic growth overnight.


“We’re basing our Russia scenarios on some sanction relief this year, but I wouldn’t count on it being an economic miracle worker,” says Deborah Medenica, a fund manager for Alger in New York. “It’s still a very big consumer market, one of the biggest in Europe. There’s a lot of good companies in Russia that have become more self-reliant because of sanctions,” she points out.