Oil prices briefly fall below $ 30 per barrel

Dmitry MedvedevImage copyrightGetty Images
Image captionRussian Prime Minister Dmitry Medvedev (right) during a visit to the factory, which makes steel tubes for the oil and gas industry in the Urals
Oil prices briefly fell below $ 30 per barrel in international markets for the first time since April 2004 before recovering again.

Brent crude, used as an international benchmark, fell to $ 29.96, but bounced back to trade at $ 30.22.

Oil prices have fallen by 70% over the past 15 months.

Earlier, Prime Minister of Russia Dmitry Medvedev warned tumbling oil prices may force his country to reconsider its budget in 2016.

He said that the country should be ready to "worst" economic scenario, if the price continues to fall.

Taxes on oil and gas produces about half of the income of the Russian government.

2016 federal budget, which was approved in October was based on an oil price of $ 50 per barrel in 2016 - the figure of President Vladimir Putin has since described as "unrealistic".

Government departments were ordered to cut costs by 10%, repeating the policy, introduced in 2015, according to Reuters.

Pensions and pay for civil servants will be protected from the cuts, which could save up to 700 billion rubles (£ 6,3 billion $ 9.1 billion).

Finance Minister Anton Siluanov said that Russia's budget can only be balanced at an oil price of $ 82 per barrel.

"New Realities"

According to him, the budget 2016 should be revised to assume oil prices of $ 40 per barrel.

"Our challenge is to adapt our budget to the new realities," said Mr. Siluanov.

Anton SiluanovImage copyrightGetty Images
Image captionRussian Finance Minister Anton Siluanov
Economy Minister Alexei Ulyukayev warned that Russia faced a long period of low commodity prices, with oil at $ 15 or $ 20 a barrel.

"The biggest risk is that there will be a low price for a long time - that is, for many years, for decades," he said.

Mr. Medvedev also said that high interest rates are holding back economic growth in Russia.

Russian Bank held rates at 11% in the last month, with the governor of Elvira Nabiullina, warning of "high volatility" in world markets.

A year ago, the central bank shocked markets by increasing the rate from 10.5% to 17%.

Inflation is 15% in Russia, but the bank expects it to fall to 4% next year.