Oil market is global, and manufacturers, even large ones can hardly affect the prices

23 april 2015 | Russia Beyond the Headlines

Moscow will launch the program for oil- to-Russian products exchange, Russia Beyond the Headlines (RBTH) writes with reference to the Russian Ministry of Foreign Affairs. In fact, the Iranian oil is not available in Russia, but is available in Asian countries under the exchange contracts. Thus, Russia minimizes the risks associated with the Iranian sanctions' lifting.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

"Probably, the Iranian party is very interested in finding partners who would be willing to buy oil, despite sanctions and resulting restrictions on financial transactions and logistical support", commented on the situation to RBTH Alexander Kurdin, the Head of the Department for Strategic Studies in Energy of the Analytical Center.

According to the expert, procurements, conducted by Russia in these conditions, can be encouraged by the Iranian party through discounts, favorable conditions for procurement of goods from Russia, political concessions. "Therefore, despite the presence or absence of its own raw materials, Russia may be interested in these purchases economically and politically", said the expert adding that this was only a hypothesis, since specific terms of trade are rather vague under the sanctions regime.

As for the impact on oil prices, the oil market - unlike the gas market - is global, and manufacturers, even large ones can hardly purposefully affect the prices, according to Mr. Kurdin. "OPEC can make it, perhaps, Saudi Arabia (better than others, because their oil supplies are fully controlled by the state), Russia and the United States (within the authority of the state) could make it by there own", said Mr. Kurdin. "However, in any case it will have an impact on prices throughout the world, and not in some particular region. As the market is global, so the prices worldwide will flatten, and the Asia-Pacific market could not be separated."

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