Analytical Center expert Alexander Kurdin took part in a discussion about oil prices and their impact on the economy in a live show on Russia 24.
Oil Prices are Expected to Remain Stable over the Next Two Years
"I think that the level of prices that's been achieved at this moment will remain more or less the same in the foreseeable future. If I prefer to err on the conservative side that could be my forecast, even though there are a number of factors that can affect the price of oil in the future. For example, the development of the situation in Venezuela can have quite an impact: recently oil production has declined drastically there and that has resulted in a global shortage of oil. If the current crisis in Venezuela persists, the shortage may get worse and if that is accompanied by increased tension in the Middle East, the prices may be pushed up even further. However, if the siltation remains the same as it is today then 70 dollars a barrel looks like the most realistic price over the next few years," the expert said.
Speaking of shale oil, Mr. Kurdin agreed with the estimates of the Energy Agency which assumes that the additional shale oil production in the US and across North America in general is going to be more than enough to meet the rising global demand for oil. However after that, additional capacity will have to be brought online and that will also involve bringing back online the facilities that have currently been mothballed under the OPEC+ agreement. This means that there are pretty good prospects of production growth for the next couple of years: this year alone North America may expand production by 1.5 million barrels a day, in other words, they are very likely to meet all the increase in demand as soon as this year. After that, the rate of production will most likely begin to decline and the realities will probably change completely after 2020, the expert summed up.
Source: Russia 24