Head of the Department for Strategic Studies in Energy of the Analytical Center Alexander Kurdin told about the reasons for reducing the oil costs and how this price cut will affect the Russian economy.
I do not see any incentive that would cause oil prices to begin to fall sharply
“Our budget for 2014-2016 was drafted on the basis of the oil price of 93-95 dollars per barrel, - said Alexander Kurdin in the interview given to the radio station STOLICA FM. – Prices reduction to $100 per barrel is essential in general, because now Libya is reopening its production in small amount”. According to him, the authorities and the rebels agreed on the partial opening of the Libyan ports for transportation of raw materials. “This allowed an increase in production, - the expert believes. - As a result of the growth in supply and as expected earlier not such a strong demand, the oil prices fell slightly”. It is normal for us, he believes. “In this case I do not see any incentive that would cause oil prices to begin to fall sharply”, - said Mr. Kurdin. Since under the conditions of uncertainty, hotbeds of tensions, the prices tend to remain at a relatively high level, the expert explained. “Even if the quotes are still declining, it is unlikely they will be lower than those laid down in our budget”, - concluded Mr. Kurdin.