• 5 days Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO
  • 10 minutes America Could Go Fully Electric Right Now
  • 7 days Majors Oil COs diversify into Renewables ? What synergies forget have with Solar Panels and Wind Tirbines ? None !
  • 25 mins Most ridiculous green proposal
  • 3 hours Rethinking election outcomes for oil.
  • 11 hours China Sets Its Sights On Global [EV, AI, CRISPR, Fusion, Navel Lint Collector] Dominance
  • 2 hours Video Evidence that the CCP controls Joe Biden
  • 24 hours The Leslie Stahl/60 Minutes Interview with President Trump
  • 4 hours The City of Sturgis Update on the Motorcycle Rally held there, and the MSM's reporting hence
  • 9 hours P@A will cost Texas Taxpayers $117 Billion.
  • 8 hours Republicans Have Become the Party of Hate
  • 2 days Even Obama can't muster a crowd to support Biden.
  • 9 hours Australia’s Commodities Heartland Set for Major Hydrogen Plant
  • 1 day WallStreet Journal editorial " . . Big Tech-Media are the propaganda arm of Democrat Party leading to one party autocratic rule. " This is the State of the Union.
  • 2 days Saudi Oil Minister Abdulaziz said getting rid of oil "Far Fetched and Unrealistic". . True. . . but
  • 24 hours Permian in for Prosperous and Bright Future
  • 1 day Clean Energy Is Canceling Gas Plants
  • 2 days America's Frontline Doctors - Safely Start Living Again!
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Russia’s Central Bank Against Copying Mexican Oil Hedge

Russia’s central bank doesn’t think that copying the Mexican oil hedge is a good idea, the Governor of Bank of Russia, Elvira Nabiullina said at a news conference on Friday, commenting on the idea that Russia could possibly insulate its budget from oil price crashes by adopting an oil hedging program.

Earlier his week, Russian news agency Interfax reported that Russia was considering whether to adopt a kind of state oil hedging program, similar to Mexico’s oil hedge, to protect government revenues from oil price crashes in the future.

The Mexican oil hedge, or the Hacienda Hedge, is considered the biggest hedging bet on Wall Street as well as perhaps the most secretive. Such hedges minimize the losses in case oil prices crash. Earlier this year, it was the oil hedge that is thought to have saved Mexico’s economy from ruin. 

Now Russia is weighing an oil hedge, and its President Vladimir Putin has instructed the relevant ministries and departments to submit a report about the pros and cons of initiating a hedging program by July 30, a source in Russia’s economic and finance departments familiar with the document told Interfax on Wednesday.

However, Russia’s central bank doesn’t think an oil hedging program is a good idea. 

“We have not yet seen accurate proposals on this topic, but if we are talking about us directly copying the Mexican experience, then we do not support such a proposal,” Nabiullina said.

“It should be noted that Mexico’s oil production and exports are much lower than Russia’s, and if we are talking about hedging all volumes, we seriously doubt that the hedging market will allow us to do this,” the governor noted.

“If the suggestion is to finance the hedge from the National Wealth Fund (NWF), it is an expensive operation and not the best way, in my view, to spend money from the NWF,” Nabiullina added.

By Tsvetana Paraskova for 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