Falling oil price costs Russia US $140b
The falling oil price is costing Russia up to US $100 billion a year,
while Western sanctions have hit the country by US $40 billion, Finance
Minister Anton Siluanov said.
He made the comments on Monday at an international financial and
economic forum in Moscow. Reports on Monday suggested Russia could cut
its oil production by about 300,000 barrels a day to support the oil
price.
OPEC members met in Vienna last week where falling prices were
discussed. Vladimir Putin said that Russia could suffer "catastrophic
consequences" from sanctions, the falling oil price and the sliding
rouble, while claiming they would have knock-on effects for other
countries.
"The modern world is interdependent. It's far from guaranteed that
sanctions, the steep fall in oil prices and the loss of value of the
national currency will lead to negative results or catastrophic
consequences only for us," the Russian president told TASS, the official
news agency, on Sunday.
The European Union and the United States imposed sanctions on Russia
following its annexation of the Crimea region in Ukraine and its alleged
involvement in eastern Ukraine.
Members of the OPEC oil cartel may decide to cut production to
support prices. Brent crude was trading at US $80.25 a barrel on Monday,
down 11 cents, while US crude was 10 cents lower at US $76.41.
Iran, Libya and Venezuela have called upon other OPEC members to
support oil prices by reducing output, although Kuwait has said that a
cut was unlikely.
The oil price has been falling since the summer on abundant global
supply, partly due to the US shale boom, and lower demand in Europe and
Asia.
Brent crude has fallen by more than a third and hit a four-year low
of $76.76 a barrel on November 14.
Daniel Bathe of Lupus alpha Investment said, "The market would
question the credibility of OPEC and its influence on global oil markets
if there were no cut."
Saudi Arabia, OPEC's biggest producer and exporter, has sent mixed
messages about a possible cut. Olivier Jakob, an analyst at Petromatrix,
said the Saudis could be influenced by the conclusion of talks about
Iran's nuclear program in Vienna on Monday, which are being extended
until next summer.
Russian Energy Minister Alexander Novak said last week that Moscow
was considering cutting its oil output, but said the measure had yet to
be agreed.
The rouble gained more than 2% against the US dollar and euro on
Monday, helped by the slight recovery in oil prices. The currency has
fallen by almost 30% against the dollar this year. Russia's Central Bank
has been spending billions to prop up the rouble, but said earlier this
month that it would limit its intervention.
- BBC
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