Feature of Nefteedollars

Despite the optimism of the markets, Russia is preparing for the radical drop in the demand for hydrocarbons

Humanity is tired of the Pandemia of Coronavirus, and any news about progress in the development of vaccines is perceived positively. And the message about the beginning of mass vaccination in some countries is even more so. The markets, including oil. Oil prices rose, approaching the level of February 2020. The countries participating in the OPEC ++ transaction began consultations on the mitigation of the conditions for reducing production.

Discussions about the scenarios of the future restoration of the economy after the pandemic began. It would seem that everything will soon return to his circles. But there are several risk factors that are unlikely to allow you to quickly return to the pre -crisis level of oil demand. And it seems that the Russian government refers to these risk factors very seriously.

Optimism regarding the restoration of oil demand is associated with the expectations that the services most affected by the pandemic will be restored relatively quickly. The share of this sector in the economy of developed countries is high, many types of services are stably in demand, regardless of growth or falling of the economy (some types of repair, hairdressers, etc.).

The mitigation of restrictive measures quickly restores the demand for them. Thus,

Part of the fall in economic activity can potentially recover quite quickly.

This will naturally support the demand for energy. Partially this already happens, which caused an increase in oil prices. If the participants in the OPEC ++ transaction do not make serious mistakes when determining quotas, there are great chances that it will be possible to increase oil production while maintaining prices near the current level.

The danger lies in the fundamental instability of the cartel. And the experience of the OPEC of 1985, and a very fresh example of OPEC+ March 2020 very clearly demonstrate that sooner or later there are participants in the transaction that violate the previously reached agreements, and this provokes the price war. The pricing war of the 1980s hit the economy of the USSR very painfully and served as one of the reasons for its death.

March 2020 showed how quickly and how much the price of oil can fall if the cartel breaks up. Fortunately, the deal was quickly restored, but the case of the breakdown of the cartel has already been demonstrated. And taking into account the motley picture of countries, publicly and secretly participating in the transaction, and the great contradictions between them is quite possible. Especially when the acute phase of the crisis will pass and the largest economies in the world will more or less recover. Accounting for this possibility is forced by the Russian government to be extremely sparingly to spend reserves and pursue a fairly strict budget policy.

The second risk factor is strategic. Its influence is not enough in the near future (several years), but it will inevitably intensify in the future. This is an energy transition. More and more countries accepts strategies for reducing CO2 emissions and introduce various kinds of limitations on fossil fuel. The proportion of electric vehicles and renewable energy sources is growing. Absolute numbers are still small, but the growth rate is significant.

And to support manufacturers with a small carbon subsequent, a special tax on CO2 emissions is introduced. In the European Union (the most important trading partner of Russia), it is possible to introduce such a tax in 2021. The details that determine the rates of this tax and the procedure for its calculation are still being specified.

In the first years after the introduction, the tax will be relatively small, so that the manufacturers have time to adapt and change their technologies. But the growth of this tax in the future has already been announced. In the parliaments of most developed countries, the proportion of the green parties is high, and their support is growing steadily.

This guarantees that carbon tax will grow significantly in the future. It is possible that tax growth will make part of the Russian export unprofitable. And this definitely needs to be prepared for this.

The main factor that clearly shows that the risks are perceived seriously - extremely stingy use of reserves. In principle, reserves are created for this to use them when a rainy day comes. In Russia, there is an amazing thing - the country's international reserves reach a maximum in August 2020. Such dynamics suggests that from the point of view of the government, real Black days are still ahead. And the reserves need to be saved.