The Oil Price War of 2020: Winners, Losers and Ways Forward

Oil Well file photo

(Russia Matters – russiamatters.org – Li-Chen Sim – March 25, 2020) Li-Chen Sim, an assistant professor at Zayed University in the United Arab Emirates, is an expert on the political economy of energy in Russia and in the Middle East. Two broad themes have dominated analyses about the failure of OPEC+ to arrive at a new consensus on oil production […]

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The Cost Of The Oil Price War Is Growing For Russia

Oil Wells File Photo

(Oilprice.com – Irina Slav – March 25, 2020) Russia’s economy needs about a trillion rubles, or roughly $12.7 billion a month over the next few months to emerge stable from the coronavirus pandemic and the oil price crash Russia’s economy needs about a trillion rubles, or roughly $12.7 billion a month over the next few months to emerge stable from […]

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Russia’s Unexpected Advantage In The Oil Price War

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(Oilprice.com – Tsvetana Paraskova – March 25, 2020) While the ruble is now at its lowest level against the dollar in four years, the cheaper ruble has a silver lining for Russia’s oil producers in the oil price war for market share with Saudi Arabia. The collapse of the OPEC+ deal and oil prices has hit Russia’s financial markets and […]

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Russia Sees Oil & Gas Income Fall By Almost $40 Billion

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(Oilprice.com – Tsvetana Paraskova – March 18, 2020) Russia’s revenues from oil and gas will be US$39.5 billion (3 trillion rubles) lower than planned, due to the tumbling oil prices, Russian Finance Minister Anton Siluanov said on Wednesday, adding that Russia’s budget will be in deficit this year. The coronavirus pandemic and the lower economic activity, coupled with oil prices […]

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The Inevitable Outcome Of The Oil Price War

Middle East Map

(Oilprice.com – Simon Watkins – March 19, 2020) One might reasonably posit that when Crown Prince Mohammed bin Salman (MbS) signalled that Saudi Arabia was once again going to produce oil to the maximum to crash oil prices in a full-scale oil price war, Russian President Vladimir Putin probably fell off the horse he was riding bare-chested somewhere in Siberia […]

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Russia Makes Move On Antarctica’s 513 Billion Barrels Of Oil

Antarctica Map

(Oilprice.com – Simon Watkins – March 16, 2020) Rosgeologia’s seismic surveys and other related work since the 70s to now indicate that there is at least 513 billion barrels of oil and gas equivalent in Antarctica, and Moscow has now set its sights on the world’s most underexplored continent Given the march that it has stolen on everyone else in […]

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Why Didn’t Russia Just Cut Oil Production?

Oil Wells File Photo

(Oilprice.com – Robert Rapier – March 15, 2020) Last week OPEC conducted meetings with a coalition of partners that have worked together to limit oil production since 2016. It was widely reported that the group hoped to come to an agreement to reduce oil production by an additional 1.5 million barrels per day (BPD). The meetings came in the wake […]

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The Reasons And Risks Behind Russia’s Big Oil Bet

Oil Wells File Photo

(Article text ©2020 RFE/RL, Inc., Radio Free Europe/Radio Liberty – rferl.org – Todd Prince – March 10, 2020 – article text also appeared at rferl.org/a/failed-talks-a-fit-of-anger-a-plot-to-sink-u-s-shale-the-reasons-and-risks-behind-russia-s-big-oil-bet/30480151.html) For years now, Russia has been laser-focused on insulating itself from an external economic shock. It may have just sparked one. In an unexpected move on March 6, Russia rejected a call by OPEC countries […]

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Russia Can Live With $25 Oil For Years

Oil Well file photo

(Oilprice.com – Tsvetana Paraskova – March 9, 2020) After oil prices collapsed in the worst drop in nearly three decades-courtesy of the renewed Saudi-Russia rivalry on the oil market – Russia’s Finance Ministry said on Monday that Moscow had enough resources to cover budget shortfalls amid oil prices at $25-30 a barrel for six to ten years. The price of […]

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Ruble, Oil Prices Tumble Amid Market Chaos After OPEC-Russia Deal Collapses

Diverse Paper Currency, Coins, Line Graph

(Article text ©2020 RFE/RL, Inc., Radio Free Europe/Radio Liberty – rferl.org – March 9, 2020 – article text also appeared at rferl.org/a/ruble-oil-prices-tumble-after-opec-deal-collapses-amid-coronavirus-fears/30476938.html) The Russian ruble fell to a four-year low after oil prices collapsed following a breakup of talks between OPEC leader Saudi Arabia and Moscow. The ruble tumbled on March 9 by more than 7 percent to nearly 74 […]

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JRL NEWSWATCH: “Putin signs Arctic master plan; The strategic document paves way for a massive industrialization of the country’s far north” – Barents Observer/ Atle Staalesen

Arctic Map

“… The document covers the period until year 2035 … authored by the Ministry of the Far East and Arctic. … approved by government and the national Security Council in late 2019. … [In addition to other factors cited, i]t prepares the ground for a major natural resource exploitation in the region and helps develop the Northern Sea Route, the […]

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JRL NEWSWATCH: “Falling oil prices threaten to derail Putin’s spending promises” – Financial Times/ Max Seddon, Henry Foy, Nastassia Astrasheuskaya

Oil Wells File Photo

Kremlin’s bid to boost economy relies on Russian budget surplus and national wealth fund “… Putin’s spending promises are under threat from falling oil prices that could hurt the savings the Kremlin is tapping to rekindle growth. The coronavirus outbreak … pushed Brent crude, the international oil benchmark, down 10 per cent to a year-low … close to $50 a […]

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Russia Is Defeating The U.S. In The Middle East Oil Game

Middle East Map

(Oilprice.com – Simon Watkins – February 18, 2020) Historically, Russia goes to great lengths to hide or disguise its strategic intentions but it clearly feels empowered enough in the Middle East to very obviously stake its claim in the region – excluding, for the time being only, Saudi Arabia – by stating that a slew of Russian companies are to […]

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The Race For Arctic Oil Is Heating Up

Arctic Map

(Oilprice.com – Tsvetana Paraskova – February 6, 2020) Despite climate concerns and environmentalist backlash against exploration for oil and gas in pristine sensitive regions of the Arctic, companies continue to explore for hydrocarbon resources in the Arctic Circle, in Russia and Norway in particular. The largest Russian energy companies are looking to explore more Arctic oil and gas resources on […]

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RUSSIALINK: “Russian Oil Production Among Most Expensive in World; Saudi analysis finds Russian oil production has one of the highest break-even prices in the world” – Moscow Times

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(Moscow Times – themoscowtimes.com – Nov. 12, 2019) Russia is one of the most expensive places in the world to produce oil, new analysis produced for Saudi Arabia’s state-owned oil giant Saudi Aramco has found. The cost of producing a single barrel of Brent crude oil came in at around $42 for Russian onshore projects, and $44 for offshore projects, […]

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Oil, Military And Nuclear Tech: Russia’s Influence In Africa

Africa Map

(Oilprice.com – Vanand Meliksetian – Oct. 17, 2019) Virtually all great powers have set their eyes on Africa as the continent’s global importance grows. Its population is set to double by 2050 and its economy is expected to expand significantly alongside its energy consumption. It is these projections that have driven Russia to invest heavily in strong relations in the […]

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Russia Considers Possibility Of $25 Oil Next Year

Offshore Oil Rig file photo

(Oilprice.com – Julianne Geiger – Sept. 9, 2019) Russia is considering the notion that oil prices may be as low as $25 per barrel in 2020, the country’s central bank said in its new forecast published on Monday, as cited by Reuters. Russia’s Central Bank has forecast in its macroeconomic forecast that oil could possibly hit that low due to […]

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JRL NEWSWATCH: “Russia’s $150 Billion Bet on Arctic Warming; France’s Macron slams the northern shipping route as an ecological disaster in the making, but Asian and European companies are lining up for a share of its (potential) riches.” – Transitions Online/ Ky Krauthamer

Arctic Map

“… [Russian has high hopes for] the [Arctic’s] Northern Sea Route [NSR] … owing to the long-term thinning of the ice pack. … [Use of the route] could shorten the journey from East Asia to Europe by up to two weeks. Norway … is skeptical[,] … has concerns about the environmental dangers of increased shipping in the fragile northern environment, […]

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Russia Could Allow Private Oil Firms To Explore Arctic Shelf

Arctic Map

(Oilprice.com – Tsvetana Paraskova – September 4, 2019) The Russian ministry of natural resources is open to the idea that private oil and gas firms could be allowed to explore Russia’s Arctic shelf, where currently only state-held firms Rosneft and Gazprom have the right to operate, Russia’s Natural Resources Minister Dmitry Kobylkin told news agency TASS in an interview published […]

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JRL NEWSWATCH: “There is no ice left on Northern Sea Route; But the number of ships that set course for the Arctic route still remains low” – Barents Observer (Norway)/ Atle Staalesen

Arctic Map

“The Arctic shortcut … connect[ing] Asia and Europe is open and ice-free … [S]hipping appears smooth … [even] for vessels without ice class standards. The last pieces of … [ice] vanished in mid-August … [T]he whole route now is free of ice. … includ[ing] the East Siberian Sea, … normally … [with] the longest-lasting white sheet. … August [to] October […]

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JRL NEWSWATCH: “Overextending and Unbalancing Russia; Assessing the Impact of Cost-Imposing Options” – RAND/ James Dobbins, Raphael S. Cohen, Nathan Chandler, Bryan Frederick, Edward Geist, Paul DeLuca, Forrest E. Morgan, Howard J. Shatz, Brent Williams

File Photo of Kremlin Tower, St. Basil's, Red Square at Night

“This brief summarizes a report that comprehensively examines nonviolent, cost-imposing options that the United States and its allies could pursue across economic, political, and military areas to stress – overextend and unbalance – Russia’s economy and armed forces and the regime’s political standing at home and abroad. Some of the options … are clearly more promising … any would need […]

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RUSSIALINK: “Russian Oil Exports to U.S. Soar to 6-Year High” – Moscow Times

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(Moscow Times – themoscowtimes.com – August 21, 2019) Russia’s oil and petroleum sales to the United States have reached six-year highs, according to U.S. Energy Information Administration data analyzed by the RBC news website. The U.S. imported 61.75 million barrels of crude oil and petroleum products from Russia in January-May 2019, up from 56 million barrels in January-May 2018. Russia’s […]

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Impact of Sanctions on Russia’s GDP Less Severe Than Low Oil Prices – IMF

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The fall in oil prices cost the country on average $48.75 billion in lost economic growth per year. (Moscow Times – themoscowtimes.com – August 6, 2019) Sanctions have had a less severe impact on Russia’s GDP growth than low oil prices, the International Monetary Fund (IMF) said in its latest report on the country. Between 2014 and 2018, sanctions slowed […]

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For Russian Economy, August Not April is the Cruelest Month

Diverse Paper Currency, Coins, Line Graph

(Paul Goble – Window on Eurasia – Staunton, August 3, 2019) August has begun with yet another decline in the value of the ruble, continuing the trend this summer month set in 1998 with default and continued last year with a decline of eight percent in the ruble’s exchange rate against Western currencies. And the rest of this month this […]

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JRL NEWSWATCH: “Russia and China; Partnership is much better for China than it is for Russia; Just how much better might not become clear for a few years yet” – The Economist

Asia Map

“[Compared to Russia,] … China[‘s] economy is six times larger (at purchasing-power parity) … its power is growing … as Russia’s fades. … Russia is evolving into a Chinese tributary. … Russia is still a nuclear-weapons state with a permanent seat on the [UNSC]…. It has modernised its armed forces and, as in Syria, is not afraid to use them. […]

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JRL NEWSWATCH: “Putin Allies’ Oil Feud Spills Into Public View” – Reuters

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“The blame game over a [Russian oil industry] contamination scandal … has breached … Putin’s inner circle. Igor Sechin, head of Rosneft, the world’s biggest publicly-traded oil company, and Nikolai Tokarev, the boss of Transneft, the world’s largest pipeline network, are embroiled in an unusually public and rancorous dispute over their companies’ responses to the contamination of Russia’s Druzhba (“Friendship”) […]

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Putin: Oil Price Volatility Is Hurting Russia’s Economy

Oil Wells File Photo

(Oilprice.com – Irina Slav – July 4, 2019) Economic realities including the fluctuating international oil prices are among factors interfering with the Russian government’s economic program, President Vladimir Putin said in an interview with Italian Corriere della Serra ahead of a state visit to Rome. Asked about why, despite his overwhelming victory in the latest elections and the virtual non-existence […]

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Putin Undermines OPEC’s Power

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(Oilprice.com – Nick Cunningham – July 1, 2019) After so much hype and anticipation, it seems that the OPEC meeting in Vienna was all but over before it had even begun. Russia and Saudi Arabia have agreed to extend the OPEC+ production cuts by six to nine months. The production levels remains unchanged, but the timing could be extended through […]

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JRL NEWSWATCH: “Russia’s Sovcomflot Says Arctic Sailings Will Become Routine; CEO of the state-owned shipping giant says melting polar ice will draw more ship operators to Siberian waters” – Wall Street Journal/Costas Paris

Map of Arctic Highlighting Permafrost, adapted from image at nasa.gov

“‘The Northern Sea Route shipments are growing …’ [Russian state-owned shipping Sovcomflot] Chief Executive Sergey Frank said … ‘It’s a question of time before all kinds of ships routinely cross it.’ Arctic routes are drawing greater attention as the global climate warms and polar ice recedes, potentially opening new paths between Asia and Europe. The mostly frozen NSR seaway … […]

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JRL NEWSWATCH: “In a Blow to Maduro, Russia Withdraws Key Defense Support to Venezuela” – Wall Street Journal/ Thomas Grove,Alan Cullison, Maolis Castro

Venezuela Map, adapted from image at cia.gov

Russia has been one of Maduro’s major supporters in its standoff with the U.S. “Russia has withdrawn key defense advisers from Venezuela, an embarrassment for … Maduro as Moscow weighs the leader’s political and economic resilience against … U.S. pressure. Russian state defense contractor Rostec … trained Venezuelan troops and advised on … arms contracts, [but reportedly now] has cut […]

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JRL NEWSWATCH: “Russian Economy Gives Putin Reasons Not to Extend OPEC+ Deal” – Bloomberg/ Olga Tanas

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“The OPEC+ pact is hurting the Russian economy, potentially giving … Putin a reason not to agree on an extension …. While higher crude prices can bring … additional revenue, production cuts are weighing on one of the country’s biggest industries. … [Putin] may have to weigh his desire for faster economic growth against the benefits of his alliance with […]

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RUSSIALINK: “Putin’s New Energy Security Doctrine Preaches Self-Reliance; Updated plan tackles sanctions and global demand.” – Moscow Times

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(Moscow Times – themoscowtimes.com – May 15, 2019) Russian President Vladimir Putin has approved a new energy security doctrine preaching self-reliance in the face of geopolitical isolation. Russia has unrivaled energy resources and is the world’s top exporter of gas and its second-biggest of crude oil. The new doctrine replaces the 2012 plan and takes into account threats to Russia’s […]

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RUSSIALINK: “In Russia’s Arctic, Oil Majors and Reindeer Herders Are Coming Together; Sustainable development and cooperation are replacing encroachment on pastures.” – Moscow Times

Map of Arctic Highlighting Permafrost, adapted from image at nasa.gov

(Moscow Times – themoscowtimes.com – NARYAN-MAR, May 15, 2019) Russia’s oil and gas giants are establishing a new model in the country’s Arctic based on sustainable development and cooperation with the region’s native reindeer herders. A decade ago, locals were struggling to sustain their traditional way of life due to the energy firms’ growing encroachment on their pasturelands. And as […]

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JRL NEWSWATCH: “Russia’s Venezuela motives: It’s about the U.S., not Maduro.” – Christian Science Monitor/ Fred Weir

Venezuela Map, adapted from image at cia.gov

“Historically, when Washington and Moscow have butted heads over a power struggle in a third-party nation, it’s been in a Cold War context. But the core issue over their divide on Venezuela today is simpler: staking out turf.” “… Russian affinity for former Venezuelan leader Hugo Chávez’ Bolivarian Socialism has no part in it. … The U.S. demands that Russia […]

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Have Sanctions on Russia Changed Putin’s Calculus?

Portion of U.S. Treasury Department Building Facade, North Side, with Sculpture of Alexander Hamilton

Since Russia’s 2014 invasion of Ukraine, Western powers have hit Moscow with economic sanctions, hoping to put a stop to President Vladimir Putin’s aggression. Have they worked? (Council on Foreign Relations – Andrew Chatzky – May 2, 2019 – cfr.org/article/have-sanctions-russia-changed-putins-calculus – Andrew Chatzky covers economics, energy, and geopolitics, and helps edit the Daily News Brief.) The United States and the […]

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JRL NEWSWATCH: “Putin Suddenly Sacks Russian Envoy to Belarus Amid Oil Row” – Reuters

Map of Commonwealth of Independent States, European Portion

“… Putin … sacked Moscow’s ambassador to Belarus, Mikhail Babich … amid a row over contaminated oil and a wider political discord between the ex-Soviet countries. Belarussian President Alexander Lukashenko has generally been more closely aligned with Moscow than any other ex-Soviet leader, while the lack of tolerance for dissent at home has made him largely a pariah in the […]

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Russia Replaces Venezuelan Crude On European Markets

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(Oilprice.com – Irina Slav – April 12, 2019) European refiners are switching to Russian sour grades as U.S. sanctions have shrunk Venezuela’s similar-grade exports, Reuters reports, adding that the Russian sour crude is getting increasingly expensive. Citing sources from the trading industry, Reuters says the situation has been made worse by the fact that OPEC members have cut mainly their […]

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Russia Seeks New Arctic Oil Frontier

Map of Arctic Highlighting Permafrost, adapted from image at nasa.gov

Rosneft, Russia’s state-controlled oil company … the largest oil producer in the country, plans to develop an Arctic cluster of oil fields over the next five years. These plans by Rosneft – led by a close [Putin] ally … Igor Sechin – fit [Putin’s] ambition to develop Arctic oil and gas resources and adjacent regions, as well as the so-called Northern Sea Route – a shipping lane through Russian Arctic waters … from Europe to the Far East. …

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JRL NEWSWATCH: “The UK executives helping Putin burnish Russia’s image; Meeting with top British businessmen could not come at a better time for the Kremlin” – Financial Times/ Henry Foy

File Photo of British Parliament Building, Big Ben, Thames, adapted from image at loc.gov

“Eleven years ago [BP’s] Bob Dudley … fled [Russia] citing ‘sustained harassment of the company and myself’ and threats to his life allegedly directed by politically connected oligarchs and Russia’s security services. Last month … Dudley, now head of the British oil group, was back, telling … Putin … at the Kremlin that he and the British company ‘deeply appreciate […]

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RUSSIALINK: “Russia’s Natural Resources Make Up 60% of GDP” – Moscow Times

Oil Well file photo

(Moscow Times – themoscowtimes.com – March 14, 2019) Russia’s Natural Resources and Environment Ministry estimates that the combined cost of the country’s oil, gas and other resources amounts to 60 percent of its gross domestic product, the RBC news website reported on Thursday. As one of the world’s top producers of natural gas and oil, Russia’s economy is heavily reliant […]

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JRL NEWSWATCH: “Officials get somber on GDP growth” – BMB Russia/ Bear Market Brief

Diverse Paper Currency, Coins, Line Graph

“… Oreshkin cited … one-off factors such as an increase in oil production and a dangerous boom in consumer borrowing as unsustainable sources of 2018 growth. … tr[ying] to refocus the discussion on structural reforms …. [and] a massive investment drive via national projects in infrastructure, demography, health, education, and exports …. Nevertheless, to the extent that the high 2018 […]

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Diminishing Returns: How Effective Are Sanctions Against Russia?

(PONARS Eurasia – Stacy Closson – January 2019 – ponarseurasia.org/memo/diminishing-returns-how-effective-are-sanctions-against-russia) Stacy Closson is a Global Fellow at the Woodrow Wilson Center’s Kennan Institute and a Senior Adjunct Professional Lecturer at American University’s School of International Service. (PONARS Policy Memo) In November 2018, the Trump administration announced another set of sanctions on Russian individuals and entities for supporting Russia’s economic integration […]

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JRL NEWSWATCH: “Russia says oil price war with U.S. would be too costly” – Reuters

Oil Well file photo

“Russia should not unleash an oil price war against the United States but … stick with output cuts even … losing market share in the medium term, one of the main Russian architects of a production pact with OPEC said. Since 2017, Russia and OPEC have cut oil production jointly … to boost the price of crude. … oil has […]

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RUSSIALINK: “Medvedev hopes pact with oil cos to rein in prices will be honored” – Interfax

Dmitri Medvedev file photo

MOSCOW. Jan 14 (Interfax) – Russian Prime Minister Dmitry Medvedev said he hoped agreements between the government and oil companies to rein in fuel prices would be followed and that it would not be necessary to resort to restrictive measures. “As you know we have a number of understandings with oil companies, including that price growth for petroleum products, motor […]

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JRL NEWSWATCH: “Russia to resume forex purchases after sanctions hiatus; Moscow will spend Rbs265.8bn between next Tuesday and early February” – Financial Times/ Max Seddon

Diverse Paper Currency, Coins, Line Graph

“Russia’s finance ministry said it is resuming foreign currency purchases on open markets after fears over U.S. sanctions saw it halt them last year to head off a slide in the rouble rate. … Rbs265.8bn … next Tuesday and February 6, the ministry said in a statement on Friday. … the first since the central bank … stopped them in […]

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Why Russia Isn’t Worried About Lower Oil Prices

Oil Wells File Photo

(oilprice.com – Nick Cunningham – Dec 27, 2018 – oilprice.com/Energy/Oil-Prices/Why-Russia-Isnt-Worried-About-Lower-Oil-Prices.html) Even as Saudi Arabia has scrambled to prevent a bust in the oil market, so far failing to head off a dramatic price slide, Russia seems just fine with prices where they are. Russia is a key piece of the oil price puzzle. OPEC, once a coalition of oil-producing members […]

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JRL NEWSWATCH: “Russian oil output reaches record high in 2018” – Reuters/ Vladimir Soldatkin

Oil Well file photo

“Russian oil production rose to a post-Soviet record high of 11.16 million barrels per day (bpd) last year on an annual average basis, data from its energy ministry showed …. surpass[ing] the previous annual record average of 10.98 million bpd … in 2017. Russian oil output reached 555.838 million tonnes last year, against 547 million tonnes in 2017. Reuters uses […]

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The Battle To Control Russia’s Pipelines

File Photo of Rosneft and Russian Flags Next to Rosneft Banner

(Oilprice.com – Viktor Katona – December 27, 2018) For much of 2018, the internal situation of Russia’s oil market was remarkably peaceful – no hostile takeovers and no overt antagonization. To a significant degree, this was the result of U.S./EU sanctions which have indiscriminately left all major oil companies in a somewhat constrained position. This meant they would cooperate much […]

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World Bank: Russia Can Withstand Oil Price Volatility In 2019

World Bank Building

(Oilprice.com – Julianne Geiger – December 4, 2018) Russia is well-positioned to withstand external shocks, The World Bank said today in its most recent version of Russia Economic Report, cited by TASS. Oil prices are expected to average $71 per barrel over the next three years, the report also said, with the caveat that there is still “considerable uncertainty” to […]

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JRL NEWSWATCH: “Every fifth Russian worker earns less than $250 per month” – bne Intellinews

Cash, Calculator, Pen

“Every fifth Russian worker earns less than RUB15,000 ($250) per month, according to … a study by the RIA Rating agency [cited by] … RIA Novosti …. Over 33% of people living in 22 regions earn less than this amount, according to the survey. [The worst were] Dagestan … (46%) … [and the] Karachay-Cherkess Republic (44%). In six regions, two […]

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