‘At $60 a barrel, the 2009 budget will be balanced, 2010 probably not,’ Pankin said.

‘Option one is to use the reserve fund, option two is to reconsider the budget.’

The original budget assumption for this year was $70 and for next year it is $95. The price of Russia's Urals crude blend stood at $56.8 a barrel, although for this year as a whole it is still expected to average around $90 URL-E.

For next year the budget is based on Urals averaging $95 a barrel, although the government has also looked at what will happen if it averages $90 and $115.

The room for manoeuvre comes from the fact that under the $95 barrel price tag, the budget is expected to yield a surplus equal to 1.5 percent of Russian GDP. As the oil price falls, that surplus is likely to be reduced or even eradicated.

Julia Tsepliaeva, chief economist for Russia and CIS at Merrill Lynch estimated that oil at $60 a barrel would erase next year's budget surplus but -- with minor spending adjustments -- would not yet lead to a deficit.

As the world's no. 2 oil exporter, Russia depends on the energy sector for a large chunk of its tax income.

Russia also has a Reserve Fund, set at around 10 percent of GDP, which serves as a safety cushion for the budget in case revenues decline. On Oct. 1, this fund stood at $140.98 billion.

The money is part of Russia's $0.5 trillion reserves, which is under increasing pressure in the face of the central bank's dollar-selling interventions to support the rouble RUSMCX and Moscow's promises that some of the money will be spent to prop up the economy and the financial sector.

Arkady Dvorkovich, the Kremlin's chief economic aide, said on Wednesday the rouble would not be devalued under any oil price scenarios under consideration by the government.

On Wednesday the rouble traded around the 30.41 level versus a euro-dollar basket which the central bank has been defending.

Some analysts were less sanguine on the threat of weaker oil prices -- which have fallen by 50 percent since peaking in July -- for the Russian economy.

‘If oil prices continue to fall the resulting deterioration of the current account could seriously undermine the ability of authorities to continue to provide support for rouble and can limit the ability of the government to proceed with anti-crisis measures,’ UniCredit said in a research note.