What will the decline in oil prices?
In this column,
financiers Financial Times argues that,
to any political consequences
will result in a decline in oil prices.
Less than three months
Brent crude fell by 15%, and now
its price is below the psychologically
important level of $ 100 per barrel. It will lead to
a special political consequences.
Producing and exporting
Oil countries have come to rely on
the fact that oil prices are high and, ideally,
constantly growing. some lay
part of the oil revenues for a rainy day,
but the majority (especially those where the population
increases) their spend. Circumstances
vary in different countries, as well as their
the ability to adjust their policies
when prices change, but down
The situation will determine policy beyond the
outside of the oil sector.
Consider four examples.
Iran
Imposed on him
sanctions have led to a severe restriction,
though not a complete cessation of exports
oil. Iran continues to sell oil
Asian countries, however, with discounts.
Therefore, any reduction in the price of oil -
bad news for the regime in Tehran.
Iran's economy is already weakened, and the reduction of
Revenue is threatening the ability of the authorities
save the fragile coalition. Preservation
mode - the main purpose, including for
Conservative surrounding spiritual
Iranian leader Ayatollah Ali Khamenei.
Discussions on Iran's nuclear program
They lasted all summer and has been extended
for four months - it is interesting that it
It proved beneficial to all participants. A
Now the threat from militants
"Islamic state" has led to
the emergence of the United States and Iran shared
interests, which did not exist before. If
oil prices remain low, there
every chance that an agreement on the nuclear
Iran's program would be achieved by
end of the year.
Russia
Nearly 15 years high
oil prices supported power
Vladimir Putin. Russia did not use
oil revenues to modernize
economy, and therefore remains raw
Power dependent on exports
hydrocarbons. But now Putin has faced
while lower oil prices
and gas. Gas deal with China
not soon begin to bear any
income. Russia will have to tighten its belt,
and low prices (coupled with sanctions,
the effects of which are becoming
more obvious to the business elite on whose
Support depends on Putin) increase
the probability that the escalation of the conflict
Ukraine does not happen. This dispute has
is not over, but the costs of the direct
confrontation and even tougher sanctions
at this point too for Russia
high. Therefore, the most likely
one will freeze conflict.
Scotland
In Scotland, the decline
oil prices hardly noticed because
hype associated with the referendum, however,
the consequences of this phenomenon can be
for it is very heavy. oil deposits
in the North Sea, which can still be
design, small, and to stimulate
work needed as reorganization
regulation of the energy sector,
and high oil prices. at low
wait for prices to increase investment not
accounts. Ministry of Finance
London is now revising
tax regime, may this fall
offer ease it. decrease
tax will reduce revenues.
And no matter what it was the result
referendum (even in the case of acquisition
Scottish independence would be unlikely to
I was able to realize the dream of creating a
Oil Fund in the Norwegian style)
the big question is how quickly will
reduced oil production in the North
sea.
Saudi Arabia
Given the growing demand
oil on the domestic market and the endless
to support its allies
Middle East Saudi kingdom
requires high and stable incomes
from oil exports. But times windfall
long gone, so the decline in prices on the
Oil recently would have
push Saudi Arabia (and other
countries) to increase production with the aim of
maintain revenue from oil to
the same level. But offers plenty
there is a risk that a further increase
production will only increase the downward
pressure on prices and will cause them to fall
lower. In a short time, and
will be calls to hold
an emergency meeting of OPEC countries,
Saudi Arabia will be asked to reduce
production to support prices. FROM
limited space for maneuver
and a very small number of other countries,
able to share the burden of reducing
production and income for the purpose of balancing
market (for example, at about $ 100 per
barrel), the decision may be much
more difficult than many might imagine.
And if Iran to resume oil production in
full, this will further complicate
situation.
Of course, if the price of
oil will fall hard enough
and for a long time, the negative impact of this
on investment and future production again
lead to higher prices. It looks like
cycle in the oil market. but the duration of
This cycle is great. after reduction
investments in companies will all
incentives to vigorously pursue their prey.
The government, which focus
in the short term, will suffer
immediate and inevitable losses.
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