What threatens Russia with falling oil prices? The reason for the fall in the price of oil

Every citizen of Russia is well aware of the situation that has developed in his country. Over the past few months, the ruble rate has fallen dramatically, reflecting a sharp rise in prices. The purchase of currency has become almost impossible, and banks are experiencing some difficulties with cashing in large capitals of their customers. Plus, the price of oil fell, which auknulos on the economy of the state as a whole.

Why did oil fall in price, or the Theory of Political Conspiracy

Considering the situation in Russia exclusively from the economic point of view, many experts note the presence of a political component in the events on the oil market. Many put forward the theory that a sharp fall in oil prices is an attempt to "crush" Russia because of its actions against Ukraine. The parallel is held with the events that took place in 1979. After the turmoil in Afghanistan, the US artificially caused a decline in the value of "black gold", thinking that this would inevitably lead to the collapse of the USSR. Is the situation now and what is the threat of a fall in oil prices for Russia, for certain it is impossible to say. It remains only to assess the economy of the great state.

What is the situation on the oil market today?

If several years ago the world was talking about the energy crisis, today they have already been forgotten. In the oil market, the supply goes a few steps ahead of demand. This is due to an increase in the volume of fuel production in the United States. It is America that today occupies one of the leading places in the export of petroleum products. A sharp increase in production is planned in Canada. Russia and Saudi Arabia supply fuel to the international market in the same volume. The fall in world oil prices is caused by the fact that the largest consumers of fuel (the USA and Canada) today not only stopped buying fuel, but also started exporting it. The market returned to Libya after internal military conflicts and Iraq with the support of the United States.

What makes it difficult to forecast oil prices?

Many analysts can not predict when the oil price will end. This is related to the specifics of fuel trade. On the international market, real goods make up only 5% of the total turnover. The remaining commodity mass is futures, which are contracts for the supply of fuel in the future. Sometimes the cost of "black gold" is affected by wars and natural disasters, economic collapse. It also happens that the price of the goods remains in a static state even with strong economic changes in the world. The only obvious fact is that the supply exceeds demand, and the situation will not change in the near future.

Economy of Russia and Energy

What threatens Russia with a fall in oil prices, no one can say, but the unequivocal connection between the situation in the energy market and the state's economy can still be traced. Since 1999, the latter has been actively growing (until 2001). This was accompanied by the devaluation of the national currency and the optimized labor of the domestic producer. In the period from 2003 to the present, Russia's prosperity was directly related to the active growth of energy prices all over the world. The favorable situation allowed the country to pay off foreign debt and increase the Central Bank's reserves by more than $ 425 billion.

It is alarming that the economic relations with Europe are far from the best for the country. The EU countries are gradually abandoning Russian fuel supplies, leaning towards cooperation with Saudi Arabia. Everything is going to lifting sanctions from Iran and restoring supplies of Iranian oil to the world market.

Russia's complete dependence on the oil market

What threatens Russia with a drop in oil prices is fairly easy to guess, since the country is completely dependent on fuel exports, especially today, when other industries began to bring a minimum income to the budget. So, the Accounting Chamber announced in 2014 the increase in the budget due to oil trade by 1 trillion rubles, as well as the reduction in revenues by 300 billion rubles from all other activities. Not only oil, but also gas, exported by Russia, exacerbated the situation. The decline in the price of oil has led to a drop in the cost of gas, as energy pricing occurs synchronously. There is an increase in the deficit by 0.5-0.7% per year.

The situation can be changed only by constructive changes in the economy and active injections into the development of other branches of activity. The state regulation, fiscal pressure on business and corruption prevent to establish new orders. To the number of turbulent industries, which in the long term could ensure the stability of Russia, we can include agriculture and metallurgy.

The excessive development of the oil and gas industry has caused entrepreneurs to not develop, they have no incentive. As a result, a drop in the popularity of domestic products on the world market was noted . Most industries are oriented to the domestic consumer, which has a striking similarity with the order that reigned during the Soviet era.

Somehow, the country is saved by the military-industrial complex and the nuclear industry. Products industries is very popular in the world. Unfortunately, in comparison with the oil and gas sector, the turnover of the output can be called miserable.

Russia's budget and falling oil prices

The budget of Russia in the next three years is calculated on the basis that the cost of oil will not fall below the $ 96 per barrel mark. This limit was considered a guarantee of the welfare of the country. In fact, Brent crude oil (the delivery, dated December) is now sold at a price of $ 78. This is 30% cheaper than the market offered in June. Despite the disadvantage of the situation, the exporting countries do not intend to reduce the extraction of fuel. After the price of oil fell, foreign exchange earnings from its sales fell threefold.

In parallel with the reduction in the budget of Russia, the value of the ruble decreased. The deficit of the American currency has formed a critical situation in large commercial corporations, since the need to repay loan commitments in currency has not gone anywhere. The behavior of the population was gassed. People, in an attempt to save their savings, began to massively buy up the currency. Demand exceeded supply, and the rate flew to a historic peak in a matter of days. When there was a fall in the price of oil in 1986, the situation was mitigated by the availability of a financial cushion, which allowed without much damage to survive the country in a difficult time. Today, the reserve of funds in banks is very limited, which makes Russian citizens worried. Plus, the government of the country this year spent about 90 billion reserve currency in an attempt to somehow keep the ruble rate. The situation did not stabilize.

What threatens Russia with falling oil prices?

Today in Russia came hard times. It is worth considering and the fact that the reason for the fall in the price of oil is not one. The state government itself poured into the fire. According to analysts and world economists, the situation on the world oil market can become a prerequisite for the collapse of the financial system, 50% of which is profit from energy sales. Experts also believe that the fall will continue as long as the cost of a barrel of oil will completely cover the cost of its production. At the moment, the price index has already fallen by 38%. And while he does not intend to stop. At the end of 2014 and early 2015, the situation was identical to that which was stimulated by the fall in oil prices in 2008.

How did the situation with oil affect world countries?

Producers of oil shale oil in the United States will cut off their fuel production costs, if its value will vary within $ 40. According to the energy agency, the cost of a barrel of $ 42 will not block the costs of producing "black gold" in the Bakkenovo formation, which is actively supplanted by OPEC member countries. In other countries, according to the Monetary Fund, the situation is as follows:

• Kuwait, the UAE and Qatar are counting on the cost of $ 70 per barrel.
• Iran - 136 dollars.
• Venezuela and Nigeria - 120 dollars.
• Russia - 101 dollars.

If these indicators are reduced, the states listed above will gradually be covered by the crisis situation. And no reason for the fall in the price of oil will be of any importance.

The impact of oil and the dollar on the lives of Russian merchants

Decrease in the cost of oil in 2014-2015. Is accompanied by a sharp increase in the dollar, which remains the most liquid commodity for the Russian government. The currency deficit forced the state to take on not only social, but also many other obligations to citizens. Most recently, part of the proceeds in the currency was sold, and rubles were paid to people. Today, the possibility of fulfilling obligations can be realized only by issuing (printing money). The deficit of dollars - as a consequence of the fall in oil prices - has not only complicated the process of purchasing imported goods, but in some situations made it completely impossible. By the way, on imported medicines and medical equipment, office equipment and mobile phones, fabrics, machines and other goods account for more than 80% of the market.

Explicit consequences of the fall in oil prices are also hidden in the import of goods. Sales volumes are catastrophically falling, prices are rising, the population has ceased to be solvent. The importers fell first, as their services ceased to be relevant. Following the "in the abyss" flew enterprises, subcontractors, in particular, transport organizations, warehouses and others. As a result, a sharp jump in unemployment and an increase in the poverty level of the population.

How does the fall of oil affect ordinary citizens

The fall in oil prices has led to global changes not only in the commercial sphere of the country. Because of a lack of material resources and in the attempts of the state to save, the financing of many programs stops for the time being. Funds cease to flow into the construction industry. Social payments are decreasing. In the banking sector, the number of useless loans is increasing substantially, which leads to the bankruptcy of financial institutions. The growth of consumer prices covers not only foreign goods, but also domestic ones. The cost of production increases as a result of the need to pay higher wages. At the same time, all the average citizens of the country are not able to provide themselves with the minimum conditions necessary for life.

What forecasts are given by analysts

Despite the complexity of the current situation, the planned and constructive actions of the Russian government can smooth the situation. According to experts, at a cost of a barrel of oil in 60-70 dollars the economy of the country can stand. Optimistic forecasts make it possible to make a small external debt of the state and a small budget deficit of 700 billion rubles.

The experience of 2008-2009 made it clear that reducing the cost of a barrel of oil to $ 40 not only did not knock the ground out from under Russia's feet, but also did not prevent the Olympics from being held on the territory of the country. Despite the impoverished state funds, the stock should be enough for a year and a half. These, of course, are all just forecasts and possible variants of the development of events, which are only an assumption. How the situation will develop in fact, no one can say with accuracy.