All oil exporters will bear loss if oil is $80 p/b

6 november 2014 | IA REGNUM

There are only 3 questions concerning budgets and oil money discussed by mass media, consider experts of the Analytical Center. How many objective dynamics and political conspiracy are there in the fluctuations of oil prices? Who and how will suffer from $80 p/b? How long will budgets stand low prices? The Chief Advisor to the Head of the Analytical Center Leonid Grigoriev answered these questions to the correspondent of IA REGNUM.

Leonid Grigoryev
Leonid Grigoryev
Chief Adviser to Head of the Analytical Center

"Economists can determine the rate of fluctuations in oil prices. Since the spring 2009 prices could remain $70-90 p/b, but awards for "Fukushima-1" and Libya moved the upper limit to $110-120 p/b", said Leonid Grigoriev to the IA REGNUM correspondent. "Bottom limit depends on costs of new fields and the rates of the Saudi Arabian budget balance, which now stands for $80-90 p/b".

If the oil price is $80 p/b, almost all oil exporters bear losses and will put pressure on partners to reduce supply, according to the expert. Transportation, chemical industry and countries with energy trade deficit get benefits from such oil prices, considers the expert. "Oil companies will lose - investment will slow down, especially in expensive and risky areas", deems Mr. Grigoriev. "In the long run the Persian Gulf countries will benefit by increasing their fraction in global production and export".

"Ten years ago Russian budget was balancing on $25 p/b, but now fall in oil prices to $80-85 is vital, although acceptable. It is no secret that Russia’s most burning issue is the effectiveness of the use of budget and large companies. If the fall in oil prices and the sanctions cause expenditures rationalizing, corruption reduction and increase in long-term investments, there will be a possibility to stop the loss", said Mr. Grigoriev.

The reason for the interview was the energy bulletin "FEC and state budget", which had been prepared by experts of the Analytical Center.