Will Russia help the United States to lower oil prices? – Rossiyskaya Gazeta
Despite the decline in oil prices – to about $ 79 per barrel, gasoline in the United States is not getting cheaper. Record 0.99 cents per liter since 2014 is Joe Biden’s most unpleasant result of his presidency. No victories in the foreign policy of the car can outweigh this factor for a country where it is more natural to move around than to walk. But the United States may have an unexpected ally in the matter of curbing oil prices – Russia.
The countries of the Asia-Pacific region (APR) reacted sluggishly to the call of the US President to start a joint sale of oil reserves. India and South Korea refused. As a result, the US has only three levers of pressure on oil prices. The first is to sell off our own strategic oil reserves from storage facilities. Without the support of other importing countries, we are talking about very large volumes, which may turn out to be critical even for the strategic stock of the USA – 600 million barrels.
However, it is too early to talk about the success or failure of the United States with the Asia-Pacific countries, says Igor Yevsin, analyst at Alfa Capital. The Japanese government is considering bypassing legislation restricting the sale of oil from state reserves. But the US’s capabilities are limited, since the country cannot, for example, publicly declare the Americans to build up, the expert notes.
The second is to lift sanctions on Iran, which will increase the supply on the world version of the oil market in the short term by 0.5 million barrels per day, and in the long term up to 1.5-2 million barrels. It would seem that it is easier? But Tehran, sensing the weakness of the United States, started talking about compensation for sanctions from 2018. As a result, the process has stalled. They will continue on November 29th. And here the US can only hope that it will be possible to persuade Iran to make concessions through the mediation of Moscow or Beijing, Tehran listens to the opinion.
The main role here will be played by politics, executive director of the capital market department of the investment company “Univer Capital” Artem Tuzov. In his opinion, if the United States has taken a course of putting pressure on OPEC + members, lifting the sanctions may be beneficial from the point of view of the accumulation of tensions in the cartel. Iran, having gained access to technology, financing and a new market for oil, will want to increase production, which will affect oil prices.
China and the United States are now in the same boat as oil importers. It is more difficult with Russia as an exporter of black gold. According to the Federal Tax Service, about 2 trillion out of 6 trillion rubles). If in 2020 the share of oil and gas revenues in the budget amounted to about 28%, then this year it will clearly grow, largely due to the rise in prices for hydrocarbons (35.6% is expected). Naturally, in this situation, our country is more profitable high oil prices. On the other hand, there are government promises to prevent an increase in retail prices in the automotive fuel market, which is still lagging behind the growth in prices for gasoline and diesel, as well as a difficult situation in the wholesale fuel market.
Prices in Russia are growing, including under pressure from foreign markets. The negative impact on fuel prices also has an impact on the price decline, largely with the strengthening of the dollar, against the background of which the ruble exchange rate is weakening. Therefore, a temporary drop in oil prices closer to $ 70 per barrel, perhaps even lower, for the period until the end of the year may be beneficial to our country. Fortunately, further oil prices can be adjusted as part of the OPEC + deal.
However, according to Pavel Sigal, first vice-president of OPORA Rossii, the main problem in our country is diesel fuel, which is no longer becoming more expensive because of high oil prices, but because of the insufficient capacity of domestic production of its winter varieties. Therefore, lowering the cost of a barrel does not allow for the desired impact on fuel prices.
But the US has one more lever of pressure on the market. From Yevsin’s point of view, the most serious influence on oil quotes could be the decision of the United States to restrict the export of crude oil from the country (the United States is in the top 10 countries in terms of oil oil volume). This leads to a fall in domestic fuel prices in the United States and to their growth in global markets. As a result, oil will also rise in price, which may play into the hands of our fuel market.