Russia fell into an oil hole: a barrel is getting cheaper, China is not buying
Falling prices for “black gold” affects the Russian economy
Oil prices, which broke records in the first days of March, are rapidly collapsing. By the middle of the month, the cost of a barrel fell by $30 and is not going to stop there. The collapse in prices showed that the outbreak in China pointed to hospital beds with the beginning of spring of tens of thousands of infected people. Coupled with geopolitical factors, the collapse of oil could add problems to the Russian economy.
The cost of a barrel fell to $100. On the one hand, even such prices can be quite high; with a different rate of falling quotes, it scares: on March 7, the “barrel” broke through another record of $ 130, which was the maximum income since 2008.
Energy market experts note a sharp drop in disappointing data from China, which is experiencing a new outbreak of COVID-19. Up to 5 thousand rubles are registered daily in the Celestial Empire. new cases, even more new patients in Hong Kong. The introduction of new quarantines and the allocation of lockdowns threatens to reflect the pace of China’s economic growth, which will entail global consequences.
Analysts at Morgan Stanley have already lowered their forecast for Chinese GDP growth in the second quarter of the year to actually the revealed figures. This is noticeable and noticeable in the increased demand for hydrocarbons, which are especially actively visited by China.
So far, the ruble has seen a sluggish reaction to negative trends in the energy sector. The cost of Russian banknotes shows a slight increase, however, the dollar in recent days continues to be at 115-120, and the euro – 120-125 rubles. According to experts, rates are observed, at least for the significance of such events and emergency measures taken by the Central Bank – raising the key rate to 20%, foreign exchange interventions, regulation of trading on stock exchanges.
If the trend is realized for a long time, then the blow can become very sensitive. Experts recall cases of discovery in 2014, when, after the events in Crimea, our country also received a package of Western supplies. The dollar has doubled in a few months. However, the cost of oil then fell by exactly the same amount, which acquired an important role in the collapse of the “wooden” one.
It remains a reason for optimism. With regard to other oil windfalls, as European states, following the US, threaten the interests of importing energy resources from Russia, dangerous and serious risks may arise.
According to Bloomberg, domestic companies have already begun severe restrictions on the sale of oil shipped in the Baltic ports. There is even a version that the United States will unblock the moratorium on the supply of Iranian hydrocarbons to the world market, if only to reduce our country’s export earnings to a minimum. “Even taking into account the fact that the Russian brand Urals is now trading at a maximum discount to the North Sea Brent, many buyers are in no hurry to buy Russian oil,” Maxim Biryukov, Senior Analyst at Alfa Capital Management Company, said.
According to Anton Bykov, senior analyst at Esperio, the latest batch of detected cases, a sharp decline in Russia, a significant impact on the statistics of domestic economic indicators: the forecast is up to 14-16% and the forecast is up to 6%.
“If we add to this the collapse in prices for and high export earnings of the federal budget, then without half of the gold and foreign exchange reserves of oil (GFR), Moscow has lost access to things, it is easy for the domestic economy to go through the most crisis of rigidity in the modern history of our country,” the expert warns.
Russia’s annual GDP in such cases will fall by 6-8%, inflation will rise above 20%, and retail sales will decrease by 15%. And the worst thing is that unemployment can reach 8-10%. In general, it remains to be expected that China will once again cope with the onslaught of the pandemic, global demand for “black gold” will recover and the barrel will again slow down in price.