World oil reserves are practically inexhaustible. Talks about the fact that it will soon be over are leisurely speculation

16 february 2015 |

The Chief Adviser to the Head of the Analytical Center Leonid Grigoriev has participated in the discussion of the Council on Foreign and Defense Policy. The topic of the discussion was "Why does the oil price fall, and how to stop it?"

Leonid Grigoryev
Leonid Grigoryev
Chief Adviser to Head of the Analytical Center cites Leonid Grigoriev: we can't hope that world's leading manufacturers of hydrocarbon resources will be able to conduct a coordinated policy. We shouldn't rely on the fact that world oil prices will recover quickly, as in 2009. Now the demand for oil is low - the United States have its own shale oil, China fills heavily its strategic reserves with the cheap oil, and Europe is in stagnation. And even if global growth begins, it will not automatically lead to an increase in energy consumption, because now, thanks to the development of new technologies the world economy depends on fossil fuels much less than before.

The huge energy machine, created in the Soviet era, continues to heat the whole world. Russia produces 10% of the world's primary energy, consumes itself of about a half, and supplies the remaining 5%  to the world market. Our country exports as much raw hydrocarbons, as the US and China consume together. We have one of the most significant levels of investment in the fuel and energy complex - 6% of the global total, while the population of Russia and the GDP account for 2.5% of the world's indexes. But Russia can not impact on oil market on a global scale, it can only adapt to it more or less successfully.

There are fears that the high cost of Russian oil in the era of low prices will reduce the market share for our country. To avoid this, it is necessary to invest in research and development that would help diversify our energy resources. The Russian economy has enormous opportunities for energy savings - there are still working outdated turbines with an efficiency of 30-40%. In the meantime, nothing in this direction is taken. Moreover, Russia has a very harmful legislation on oil, which makes production of oil on small fields unprofitable, while the USA provides a negative tax rate for such activities.