Oil pick up was hitting Russia, came on its own 
Yesterday crude oil again rose in price. The usual trend of recent times. Price circling around $45 per barrel, and then picking up to “fifty dollars”. A year ago it seemed that $25 is forever. And Russia will deflate. But was blown away somehow Norway Saudi Arabia.
The first spends a stash of sovereign Fund, the second – already borrows to cover the budget deficit. Costly rich countries cheap oil…
A month ago, we gave a version of the Egyptian journalist Imad Annan stated in an Arab newspaper NoonPost that Saudi Arabia, along with the Americans played on the side of Assad’s opponents, and deliberately kept oil prices as low as possible to bring down the Russian economy. Calculation, as we have already mentioned, was as follows: Russia is a colossus on feet of oil – filled up (especially in terms of sanctions). And to help Syria can’t.
The same idea is, more straightforwardly, without the Eastern ornate outlined in February 2016, the American journal The Fiscal Times: “Half of Russian budget depends on oil industry, so the decline in oil prices may be the result of a deliberate policy of Riyadh and Washington to strike at the Russian economy”, – he wrote. This phrase we also quoted in a previous article.
Not surprisingly, the entry of Moscow in the conflict in terms of European sanctions, and at extremely cheap oil was a surprise to many. An even greater surprise was, as noted by Imad Annan, the failure of the project “Syria after Assad” in view of the achievements of the Syrian regular army, with permanent Russian-Iranian support of…”.
After that, Saudi Arabia (SA), which categorically refused to support the agreement on the freezing of oil production, has sharply changed the position. And they are ready to show flexibility at the extraordinary summit of OPEC and other oil producers, which will be held in late September in Algeria.
This is not surprising. The IMF has calculated that due to low oil prices, countries in the Middle East in 2015 cumulatively lost $360 billion What is the percentage of the Saudis is not specified, but, according to experts, it is about one third.
In less than last year, SA’s foreign exchange reserves declined by $73 billion of foreign funds were withdrawn more assets in $70 billion in Reserves is enough “head” – $654,5 billion But given that the country produces almost nothing but oil, and used to live in Grand style, luxuriate she left 7-8 years. For the deficit from its budget last year reached 21.6% of GDP ($151 billion) in 2016 is expected to reach 19.4% of GDP.
Saudi Arabia for the first time in 25 years took the money in debt abroad. In the capital market, the country won $10 billion for a period of 5 years. Lenders come from the US, Europe and Japan. Among them, JP Morgan, HSBC and Bank of Tokyo-Mitsubishi. Oil to gather in misfortune Qatar and Oman also this year took billions of dollars.
By the way, finding alternative sources of replenishment, except energy, SA invented the original innovative solution: raise the visa fee nearly six times. From 3 October for a multiple entry visa valid for six months will have to pay up to 3 thousand Saudi riyals (about $800).
Single-entry visa for two months would cost 2 thousand rials plus 100 riyals for each additional month. What to do? The authorities are ready to pay fees to those who come to the country for the first time with the purpose of pilgrimage (Hajj and Umrah).
Another oil state – Norway – even started to wonder whether to continue to produce oil offshore in the North sea, if it is almost a losing business at current prices. For the first half of 2016, the year Norway increased its production of hydrocarbons by 3.5%, but the profit from the offshore petroleum fell by 29% to 38.7 billion euros (about $4.6 billion). As a result, according to the official forecast, GDP will grow only one percent this year and 1.7% in 2017. But grow all the same!
And while you grow up, Norway will be spent on support of the economy suffering from recession, $25 billion from the sovereign Fund of the country. By the way, of the Fund, which is the largest in the world, will be printed for the first time in history. The net amount of withdrawals from it will amount to 84.2 billion kronor, not kroner 4.9 billion as planned in October of last year. As they say, to walk so to walk!
The only one who learned from low oil prices, some profit – it States. Russia they, as you can see, not strangled. They themselves broke several dozens of interesting companies that are specialized in the slate, but the rest, along with extracting shale oil and gas traditional hydrocarbons, still remained afloat.
But the thing that managed to get rid of excessive stocks of oil from the strategic petroleum reserve (SPR) on a more or less reasonable prices. Acceptable or low? For countries-producers, of course, low. For America, which has garnered 695 million barrels of oil, equivalent to world consumption during the week is acceptable.
Why? Because the world rapidly goes to the fuel associated with electricity and “sister” to him. The era of electric vehicles has already arrived. It remains to solve the problem with the battery (not at 200 km is enough, but at least 1000) and to add a little speed (140 km/h is only for the city, and there is a road), and the gasoline engine will start to leave in the past. And behind him, gradually, other types of engines.
Finally, a growing number of vehicles with fuel-efficient engines and other problems. Therefore, in the interest of America to ease the stockpile of strategic reserves of oil, yet the demand for it and is willing to pay a lot more. In General, it is too late.
The sale of oil from strategic reserves but also to the high production in recalcitrant allied countries (primarily Saudi Arabia) and oil was kept at a record low level, while it’s not scared, and she went up.
What’s next? According to Russian oil analysts should consider such factors as the depletion of oil fields in several countries outside OPEC, in particular, in Mexico and Norway; financial problems in Brazilian oil giant Petrobras; finally, the depletion of oil fields in Russia – Western Siberia – could also lead to a temporary decrease in production, reduce the world supply of oil in an average of 100 thousand barrels per day.
Therefore, analysts predict that by the end of 2016, the increase in the price of oil Brent will go up to $60-65 per barrel. This is assuming that in September all the “rich and able” to agree with the algorithm that for the sake of greater profits, they need to start to work less. Paradox? But so it is… From the song words can not erase. From Proverbs too. “Do not dig a hole to another…”. Think it’s called. What he wrote in The Fiscal Times, saying that low prices “like… hit by the economy of the Russian Federation”. Hit? Bounced? Boomerang was…
