Russia’s exit from the OPEC+ deal offers a chance to earn new revenues and “to throw US shale oil industry overboard”, wrote Dmitry Kiselyov, a Russian journalist, deputy director of Rossiya Segodnya international news agency on March 9 on his Telegram channel.
Russia is having an advantage in the price war with Saudi Arabia, according Western analysts, because Russia’s budget will stay balanced when oil prices are as low as $40 per barrel, thinks Kiselyov. As for Saudi Arabia, oil has to be traded at a balanced budget price of about $80 per barrel in order to get required billions of dollars in investments for the economic modernization plan announced earlier, believes the journalist.
The Russian government and the Central Bank “calm down the markets” through introducing a comprehensive decision, a measure called the budget rule, while the whole world is panicking, says Kiselyov .
“Do not rush to currency exchangers. Tomorrow at 10 a.m., the real, not virtual, Russian currency market will open, then it will become clear what ruble’s real exchange rate will be. Virtual Forex exchanger threatens with a 75 rubles per one dollar forecast for almost a day, betting on a panic, but not taking into account the data from the main Russian market players, whose statements and actions really determine the exchange rate of our currency, ” states Kiselyov.
On March 6, Russia rejected the Saudi Arabia’s proposal to further limit oil production in connection with the spread of coronavirus and withdrew from the OPEC+ deal during negotiations in Vienna. As of March 9, the Brent crude oil price fell by 30% to $32 per barrel.
On March 9, the press-center of Russian Finance Ministry announced that the sale of foreign currency from the reserves of the National Wealth Fund (NWF) would compensate in 6-10 year the budgetary shortcoming associated with the fall in oil prices to $25-30 per barrel.
Source: Rossa Primavera News Agency