Trouble between Turkey and the Kurds led oil prices to rise to $59 per barrel on Sept. 26, their highest level in more than two years.

Kurds held a referendum in their enclave in Iraq calling for setting up an independent Kurdish homeland for the ethnic group, who spill over the borders of neighboring Turkey, Iran and Syria.

Turkish President Recep Tayyip Erdogan has been an implacable opponent of Kurdish identity. He has come down hard on the group following the referendum, including making a threat to ban exports of oil from the enclave that formerly remains part of Iraq, but in practice is run relatively independently from the center.

Turkey threatened to cut off the 700,000 barrels a day of oil that Iraqi Kurdistan ships to the Mediterranean via a Turkish pipeline. Erdogan is afraid the referendum will provoke Kurds living in Turkey to push for independence as well as to demand more rights to language and separate education. Turkish authorities have been waging a de facto civil war against predominately Kurdish cities in its southern and eastern regions. Analysts doubt that Erdogan will carry through on his threat, but the possibility has been enough to send oil prices soaring.

The jump in oil prices will come as a blessing for Russia, which remains heavily dependent on oil revenues to run its economy. A new three-year budget is about to be submitted to the Duma for approval that has a very conservative estimate of $46 for the average price of oil in 2017, $44 in 2018 and $42 in 2019 and 2020.

But those prices look very low compared to the average of price of oil each month this year, which has bounced between a low of $46.17 in June and a previous high of $54.3 in February. Average monthly oil prices have been over the $50 mark in five out of the last eight months.

Underestimating the oil price in the budget has been a favorite habit of the Duma in the boom years. The result is that significant “surplus” funds are generated each year that deputies could then assign to pet projects, which are a major source of corruption.

More recently the prudent liberal fraction in government introduced a “budget rule” where the estimate of oil prices was averaged over the last three years and that was used to set the budget estimate.

The estimate is important as it dictates the amount of money the government can spend and plans have to be made to fit the projected revenue. Using an average over several years was supposed to remove some of the unpredictability; however, following the collapse in oil prices in 2014 from more than $100 to under $50, the government has been forced to abandon the rule for the meantime.

Still, the higher than budgeted price of oil has already made itself felt. While the share of oil revenues in total federal revenues has fallen steadily from more than half to between 25 and 30 percent now, Russia is still heavily reliant on the petromoney. In 2016 the Ministry of Finance faced a major crisis as it was short some RUB2 trillion of revenues to pay for everything, even with a hefty deficit, as the average price of oil in 2016 was $43.