Even oil price of $40 per barrel unlikely to seriously affect Russian economy — minister

The Russian economy will not be under serious pressure even if oil prices drop to $40 per barrel, Russian Economic Development Minister Maksim Oreshkin said.

"If the global economy faces serious problems, Russia will also be affected, but not as seriously as before. $60 per barrel is the benchmark at which we can invest in new projects, develop them. [The price of] $40 per barrel will complicate things, but even with this price we will not experience serious pressure on financial markets and domestic economy from the point of view of budget and balance of payments," the minister said.

In late August, Russia’s Economic Development Ministry downgraded its oil price outlook to $62.2 per barrel from $63.4 per barrel for 2019 and to $57 per barrel from $59.7 per barrel for 2020 in its April forecast.

The ministry projects that the oil price will go down to $56 per barrel from $57.9 per barrel in 2021, to $55 per barrel from $56.3 per barrel in 2022, to $54 per barrel from $55 per barrel in 2023, and to $53 per barrel from $53.5 per barrel in 2024 in its April forecast.

Oreshkin added that the falling oil prices are unlikely to bring the Russian economy to the verge of the disaster, although trade wars of major economies will affect all nations without exception.

"To a significant extent, we are protected by macroeconomic structural reforms of the past several years," he said. "That’s why oil prices falling from $70 per barrel to $60 per barrel put no pressure on the domestic economic situation. There will be no disaster."