Hero of the bottom

Igor Sechin split OPEC and forced the market to panic. What is now waiting for the Russian economy?

On Monday, March 9, immediately after the opening of the auction, oil quotes collapsed by 30%. The cost of a barrel WTI dropped below $ 30, and the dollar exchange rate jumped up to 75 rubles.

The cause of the collapse was the price war in the oil market, unleashed by Saudi Arabia against Russia after the disruption of the OPEC+negotiations. Members of OPEC and oil producing countries that are not part of the cartel, for the first time since 2016, could not agree on the regulation of oil production. This happened due to Russia's refusal to go to an additional decline in prey in order to support quotes in the conditions of the coronavirus epidemic.

At the same time, in recent years, Russia willingly cooperated with OPEC. In 2018, the head of the Ministry of Energy, Alexander Novak, estimated the budget winning from a transaction with OPEC of five trillion rubles of additional revenues. Oil companies, according to Novak, earned about two trillion rubles.

Only Rosneft consistently opposed the reduction of prey. In December 2018, the head of the company Igor Sechin wrote in a letter to Vladimir Putin that the participants in the OPEC agreement and the countries joining him were playing into the hands of US oil industry workers. The head of Rosneft called a reduction in oil production reducing oil production "threat to the development of Russian industry."

During the latest negotiations with OPEC, Igor Sechin again tried to convince Vladimir Putin that the agreement with the cartel is harmful to Russia, and the shale manufacturers can be ruined if oil prices below $ 40 per barrel.

“From the point of view of the interests of Russia, this deal [with OPEC] is simply meaningless. We, giving way to our own markets, remove cheap Arabic and Russian oil from them to clear a place for the expensive shale American. And to ensure the effectiveness of its production, ”said Rosneft spokesman Mikhail Leontyev.

According to Bloomberg sources, Rosneft plans to increase production by 300 thousand barrels per day in April.

“New” asked experts, for which the state -owned company does not like OPEC so and what the collapse of oil prices are fraught with the Russian economy.

Mikhail Krutikhin

Partner of the Consulting Agency Rusenergy

- It was beneficial for Russia to cooperate with OPEC over the past three years, besides, it cost it nothing. The Minister of Energy Alexander Novak constantly announced the solidarity of Russia with the cartel and said that Russia is reducing oil production. However, this was not true, since our companies fulfilled their corporate plans every year and increased prey. At the same time, the oral participation of Russia in the OPEC+ agreement helped to increase the price of oil. This led to the fact that over these three years, Russia has received an additional several trillion rubles to the budget.

Igor Sechin is guided by incorrect ideas about the consequences of the rupture of the transaction of Russia and OPEC+.

Low prices will not lead to the disappearance of competitors in the form of American companies producing shale oil, or to undermine the positions of Saudi Arabia.

Previously, there was a Medvedev government, which somewhat restrained the appetites of Sechin: he was not given permission to finance projects from the FNB, they delayed a decision on benefits for his megaprojects. Sechin did not agree with the plans of the oil lobby, which included the curator of the fuel and energy complex Dmitry Kozak, the Minister of Finance Anton Siluanov and even Medvedev himself.

Alexander Novak is a non -self -state figure. In addition, Prime Minister Mikhail Mishustin appeared in the new government, who has a very good relationship with Sechin. The Kozak was removed, reduced to the Minister of Finance. Now Sechin’s position in the government has been very strengthened, and it began to largely determine the policy in the field of oil.

The Saudi Arabia strategy is to conquer market niches. Now everyone is for himself, and Saudi Arabia expects that at a low oil price, she will be able to get the same profit. At the same time, Saudi Arabia, Kuwait and those countries that fight, for example, for the Chinese market, should fight for the market share. And Russia, which has fixed markets and boost, is worth maintaining the volumes necessary for domestic consumption.

Marseille Salikhov

Director of the Economic Department of the Institute of Energy and Finance, Researcher at the Higher School

- At the end of December, the Minister of Energy Alexander Novak said that the deal with OPEC brought Russia 6.2 trillion rubles of additional revenues to the federal budget. Now the position has changed.

My personal opinion lies in the fact that for Russia in a long-term plan, the transaction with OPEC is unprofitable: when you accept some restrictions, you agree that other manufacturers will have the opportunity to increase the offer.

However, at the moment, refusing it was a mistake. From the point of view of the situation in global financial markets, a coordinated reduction in production is the right decision. Due to the coronavirus, the demand for oil clearly decreased. Therefore, the reduction in oil production for several months made sense. The beginning of the price war in such conditions will lead to the consequences that we now see - this is oil of $ 30.

In the long run, prices will remain approximately at the same level.

For Russia, this means ruble devaluation, inflation growth, and falling in the stock market. Apparently there will be an economic recession.

Such a sharp reaction of Saudi Arabia can be explained by the fact that the state leadership reduced oil production additionally, in excess of its obligations in OPEC. When Russia refused to reduce oil production, Saudi Arabia followed it, deciding to increase prey. Because they really have opportunities for this. Russia, even if it wants, will not be able to increase production by 10%.

Slantsy manufacturers have 60% of production was cheap in 2020. The current fluctuation in the price of the sale of this oil does not affect in any way, so now they will not reduce production. In addition, [on the market], for example, companies such as Exxonmobil, Chevron, etc. play a very large role. They have a large financial resource that allows them to send out sharp fluctuations in prices. In 2014, they already [tried to reduce the shale prey through collapse of prices] and then production was really injured. But when prices began to increase, it also began to grow. This is an inevitable process, why fight it?

In general, if you look at the structure of the economy and dependence on oil revenues, it is clear that for Saudi Arabia [price war] is a more painful question. The dependence of their budget [on oil] is greater and the price of breakstream for their budget is higher. Unlike us, they have a fixed course to support it, they must spend their reserves. At the same time, they have more accumulated reserves than that of Russia. But the fact that this war is more painful for them helps us slightly. It hurts us too.

The budget rule says that if oil prices are lower than the base price of $ 42.4 per barrel, then this difference will be funded by the National Welfare Fund. Now it has $ 150 billion. There is no threat to budget stability in the short -term sense, but for the economy in general the effect will be negative.