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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. 

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Russia’s Economy Minister: Russia Can Live Forever At $40 Oil

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The OPEC/non-OPEC deal is working, and the current underlying key assumption of Russia’s economic policies—oil prices at US$40—can allow it to live forever at that price or below, Russia’s Economy Minister Maxim Oreshkin told Bloomberg in an interview on the sidelines of the St. Petersburg International Economic Forum on Thursday.

OPEC and Russia are already achieving what they intended to achieve with the deal—a decline in crude oil inventory levels around the globe, the minister said.

Arguing that OPEC “has not failed at all” in its attempt to drive oil prices up, Oreshkin said that the price of oil is now much higher than it was this time last year, before the cartel and 11 non-OPEC producers led by Russia struck the initial output cut deal.

“We are targeting tighter short-term end of the curve,” the minister said, noting that hedge funds are currently taking risks with medium-term prices a year or two ahead.

From a Russian economy perspective, the key assumption on which all Russian monetary and fiscal policies are based is oil at US$40, Oreshkin said. Russia is not as dependent on the price of oil as it was five or ten years ago, the minister noted, and said:

“We are actually ready to live forever at oil prices $40 or below.” Related: Saudi Prince Mohammed Meets With Putin To Discuss Oil, Syria

On Wednesday, Saudi Energy Minister Khalid al-Falih said—after meeting with his Russian counterpart Alexander Novak—that OPEC and non-OPEC producers are committed to do “whatever it takes” to draw the global crude oil inventories down to their five-year average.

Last week, just a day after the output cut deal was extended as-is until March 2018, Novak said in an interview with CNBC that deeper cuts to OPEC’s oil production were not out of the question, but their implementation would depend on how things unfold with the current agreement.

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Oilracle on June 01 2017 said:
    --- Russia Can Live Forever At $40 Oil----

    USA Can Live Forever At $40

    USA Can Live Forever At $20 even better

    USA Can Live Forever At $5 fantastically better
  • Biff Lapre on March 27 2018 said:
    It has to be frustrating for everyone the shale cowboys have learned to stay in business at $40 oil.

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