• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 8 hours Its going to be an oil bloodbath
  • 27 mins US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 1 hour Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 2 hours Marine based energy generation
  • 4 hours What If ‘We’d Adopted A More Conventional Response To This Epidemic?’
  • 15 hours The Most Annoying Person You Have Encountered During Lockdown
  • 12 hours Trafigura CEO Weir says, "We will see 30% to 35% drop in demand". That amounts to 35mm bbls/day glut ! OPEC+ 10 mm cut won't fix it. It's a DEMAND problem.
  • 18 hours Which producers will shut in first?
  • 6 hours Real Death Toll In CCP Virus May Be 12X Official Toll
  • 16 hours Cpt Lauren Dowsett
  • 17 mins TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 13 hours Today 127 new cases in US, 99 in China, 778 in Italy
  • 17 hours Washington doctor removed from his post, over covid

Breaking News:

IEA: OPEC Can’t Save The Oil Market

Alt Text

Oil Hits $20 For The First Time In 18 Years

Oil prices plunged on Monday…

Alt Text

Oil Demand To Plunge By 10 Million Barrels Per Day

With the global economy reeling…

Alt Text

Oil Prices Retreat After Massive Rally

After a panic-driven bloodbath on…

Andy Tully

Andy Tully

Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com

More Info

Premium Content

Russia Expects Oil Price To Rise, But Not Enough To Balance Moscow’s Budget

Russia can’t live with oil prices below $79 per barrel, but Finance Minister Anton Siluanov says he doesn’t expect them to drop much lower, and they may even rise a bit in the medium and long term. Still, he says, that won’t be enough to stabilize Russia’s strained budget.

Two-thirds of Moscow’s annual budget comes from taxes on Russia’s oil and natural gas companies. The budget laid out for 2015 requires an oil price of $100 per barrel. Now Siluanov has come to agree with many energy analysts that that the price will remain around $80 for the foreseeable future.

“We are now in a new environment,” Siluanov told the Federation Council, the upper house of Russia’s parliament, on Nov. 26. “[S]o our budget, economic plans should be built assuming the new macro environment which, we think, will not change any time soon.”

Related: Veteran Oil Minister Says OPEC Alone Can’t Set Oil-Price Levels

How long will that be? “The new oil price of $80-90 per barrel is most likely to stay over the medium- or even longer-term,” Siluanov told the lawmakers.

That will leave Russia’s budget short of money – money that will be hard to get due to US and European sanctions imposed not only on Russia’s oil industry but also on its banking sector, leaving Moscow shut out of Western money markets.

As a result of the lower price of oil, the government of President Vladimir Putin will have to adjust spending during 2015 through 2017, Siluanov told the Federation Council. The minister has already warned Putin about the consequences of his plan to increase defense spending.

In fact, he told the legislators that Russia’s budget would lose huge amounts of revenue if oil prices don’t begin rising soon and the ruble remains weak. “The Russian budget may lose 500 billion rubles [nearly $10.7 billion],” he said.

And if the Russian economy continues with sluggish growth, Siluanov said, that shortfall could double to 1 trillion rubles, or nearly $10.7 billion.

Siluanov’s comments follow those by Alexei Ulyukayev, Russia’s minister of economic development. In an interview published Nov. 25 in the German newspaper Franfurter Allgemeine Zeitung, he said Russia’s economy is likely to grow by between 0.7 percent 0.8 percent by in 2014.

Related: Russia Might Be Forced To Cut Oil Production

The outlook for 2015 so far is 1.2 percent growth, Ulyukayev told the newspaper, but he added, “We possibly will have to correct our forecast.”

In the interview, Ulyukayev dismissed the idea that the 30 percent drop in the price of oil since June was somehow being engineered by some countries to hurt Russia and other oil producers. Instead he attributed the decline simply to shifts in supply and demand.

As a result, Ulyukayev agreed with Siluanov that oil prices soon will stabilize and perhaps even rise a bit. “Now the market is looking for a new equilibrium,” he said. “I think that in 12 months it will be found close to $90 per barrel.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News