Fifteen years of oil at $50 a barrel isn’t the worst nightmare for Russian central bank Governor Elvira Nabiullina.
Russian oil output rose to a post-Soviet record last month as producers take advantage of the weak ruble to push ahead with drilling. The nation’s production of crude and condensate advanced to 10.74 million barrels a day, 1 percent more than a year earlier and topping a record set in June, according to data from the Energy Ministry’s CDU-TEK unit.
Russia is bracing for more foreign asset seizures over the defunct Yukos Oil Co. after France and Belgium began enforcing a $50 billion damages award, a Kremlin adviser said. France arrested insignificant funds in accounts of Russian companies and diplomatic missions at the local subsidiary of OAO VTB Bank, Economy Minister Alexei Ulyukayev said Thursday. Belgium earlier served Russian state-owned lenders and entities with seizure notices as part of a 1.65 billion-euro ($1.9 billion) court ruling, ordering them to declare assets belonging to the Russian state or debts to it.
Russia’s economy showed signs of recovery in the first and second quarters amid a declining dependence on oil, Russian Deputy Prime Minister Arkady Dvorkovich said. “Oil prices are not as important to the Russian economy as before,” Dvorkovich told Bloomberg TV Monday at the World Economic Forum on East Asia in Jakarta, adding that other factors such as the global environment and Russia’s own polices influence its economy. “As far as oil prices are concerned, we can live with different prices and still grow.” US-traded Russian stocks last week posted their longest streak of weekly gains in two years as higher oil prices and a stronger ruble boosted the outlook for companies that depend on domestic demand.
Russian President Vladimir Putin has hailed the nation’s economic performance. Speaking in a televised call-in show with the nation, Mr Putin said the nation’s economic performance has remained strong, despite Western sanctions slapped on Russia over the Ukrainian crisis and a slump in global oil prices.
The Russian economy must adapt to the reality of oil prices that could fall as low as $40 a barrel, President Vladimir Putin said as he faces the worst financial crisis since coming to power in 2000. “I don’t know how quickly it will happen if prices stay at today’s level, or if they will drop lower than $60, $40,” Putin said today at his annual press conference in Moscow. “The economy will structure itself accordingly, however much is necessary.” The US and Saudi Arabia, which with Russia are the world’s three biggest crude producers, may be colluding to push down the price of oil, Putin said.
Russian President Vladimir Putin has said he believes peace in Ukraine is possible but that neither side is fully upholding a peace deal struck in September. In an interview with German television, Mr Putin said he is convinced it is possible to end the deadlock in east Ukraine, where pro-Russian rebels have been battling Kiev’s troops in a conflict that has claimed at least 3,500 lives since March. But he also said that neither the rebels nor Ukrainian troops had fully withdrawn from key locations in the region to create a buffer zone, a key part of a truce deal agreed to in September.