Russian energy market: forecast from “Skolkovo” analysts
Experts from the Center for Energy, which is located at the Moscow School of Management “Skolkovo”, have analyzed the current situation in the energy segment. In their opinion, there is a weakening of the Russian economy from oil exports, but this is due to global phenomena rather than a strategy developed by the state. The Russian energy market is experiencing a decline in demand for raw materials, which could have serious consequences for the industry.
Despite the fact that the government has been promising to reduce the dependence of the country’s economy on the oil segment for several years now, the production of energy resources continues to play a major role in budget formation. This year, however, global factors have interfered with the usual course of processes. The coronavirus pandemic, which affected almost the entire world, led to a sharp decline in demand for oil. As a result, Russian and foreign producers incur huge losses. According to the analysis of Skolkovo specialists, if the situation with the pandemic worsens, export supplies will significantly decrease and the country’s income may drop by 13%. And Russia’s dependence on oil and gas production will be disastrous for it.
As the forecast from Energy Center analysts shows, the drop in demand and the subsequent collapse of commodity prices threaten the country’s GDP with losses of 5 to 13%. If previously the profit from oil and gas exports was about $150 billion, this year we should expect a decline by about 3 times – to $50 billion. There is also a worse scenario, when the price of Russian Urals oil will not rise above $15 per barrel. Under this scenario the profit from raw materials export will drop 10 times and will not exceed $12 billion.
Igor Yushkov, a leading analyst at the National Energy Security Fund, states that this scenario is quite possible. Last year, a barrel of fuel cost 60 dollars, and this year it is unlikely to be more than 20-30 dollars. At such a price, the export duty will be almost zero.
The sale of raw materials is only one of the factors that generate revenues from the industry to the budget. The oil and gas rent also includes the production tax. At the moment, the fees for fuel export are almost minimal. For comparison, in April the duties amounted to about 52 dollars per ton, last year the amount of fees was at the level of 100 dollars per ton. It turns out that the state lost about half of its profit. And if earlier the revenues from the oil and gas industry amounted to 40% of the budget, now the income from it will barely exceed 20%.