MOSCOW: The global agreement on the reduction of oil supplies between the Organization of Exporting Countries (OPEC) and non-OPEC countries could have a negative impact on the Russian economy, according to the country’s central bank. OPEC, along with other exporters, including Russia, agreed to maintain a limited supply of oil for the second consecutive year to reduce inventories and support prices.
Russia announced it has cut its oil production by 300,000 barrels after the country produced a record 11.247 million barrels per day in October 2016.
According to the Russian Central Bank, the peak in fuel consumption of cars is expected in the middle of 2020, which would significantly affect raw material prices.
“The OPEC agreement, together with a lower demand for natural gas from abroad, will temporarily limit the growth of Russian production, which may have a negative overall impact on the development of the economy”, said the Russian Central Bank.
The fossil fuels such as oil, gas and coal are non-renewable resources, which account for about three-quarters of EU energy consumption. They are used to produce electricity and heat, power the transport and as a raw material in the industry.
Earlier in the week it became clear that the Russian Ministry of Economic Development is planning to prepare a new macro forecast for 2018-2020 in April, in which the price of the Urals oil variety in 2018 will be 50-60 USD per barrel.
