Russia to face decade of oil price at $50

Russia to face decade of oil price at $50

Russia’s Economic Development minister Maksim Oreshkin said that the ministry expects the oil price to slip to $50 per barrel by 2025-2030 and stay at that level long-term.

According to him, this trend is connected with the dynamics on the commodities markets. 

"We expect a rather substantial drop, a rather low level of prices for main commodities over the long-term. According to our estimates, prices will be at around $50 per barrel by 2025-2030 and stay at that level in real terms further on," the minister said following the government meeting that considered the social and economic development until 2036.

Economic Development Ministry’s base case scenario of the Russian social and economic development outlook until 2024 envisions a gradual decline of the oil price in the period between 2018 and 2024: after rising to $69.6 per barrel in 2018 from $53 in 2017, the average annual price of Urals crude oil will slide to $53.5 per barrel in 2024, TASS reported.

The average price of Urals oil will be $63.4 per barrel in 2019, $59.7 per barrel in 2020, $57.9 per barrel in 2021, $56.3 per barrel in 2022, and $55 per barrel in 2023.

A senior analyst of 'Uralsib', Alexei Kokin, speaking to Vestnik Kavkaza, noted that the Ministry of Economic Development's projections over the next 15 to 20 years are only part of the department's projections for all possible scenarios. "They prepare a global forecast on the basis of several scenarios. Forecasting itself is extremely difficult. Therefore, the oil price at $50 is not a calculation, but a prerequisite on the basis of which conclusions are made about consequences for the Russian economy. That's common practice, including for the International Analytical Agency, which usually develops three basic scenarios and sub-options," he explained.

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