Oil price slide and sanctions ‘cost Russia $140bn’

Oil price slide and sanctions 'cost Russia $140bn'

The falling oil price is costing Russia up to $100bn a year, while Western sanctions have hit the country by $40bn, its finance minister has said.

Anton Siluanov made the comments on Monday at an international financial and economic forum.

Reports on Monday suggested Russia could cut its oil production by about 300,000 barrels a day in an attempt to support the oil price.

Opec members meet in Vienna this week where falling prices will be discussed.

The oil price has been falling since the summer on abundant global supply, partly due to the US shale boom, and lower demand in Europe and Asia. Brent crude has fallen by more than a third and hit a four-year low of $76.76 a barrel on 14 November.

Analysts expect the Opec oil cartel to agree a cut in production to support prices. Brent crude closed on Friday just above $80 a barrel, while US crude was at $76.51.

“At minimum, in order for the rouble not to decline, a commitment by Opec to stop oversupply and hold to its official 30 million barrels per day production target is probably required,” said Tom Levinson, an analyst at Sberbank.

Russian energy minister Alexander Novak said last week that Moscow was considering cutting its oil output, but said the measure had yet to be agreed.

Alexei Ulyukayev, the economic development minister, said last week that the slide in the oil price could have a significant impact on people and companies in Russia.

The European Union and the United States imposed sanctions on Russia following its annexation of the Crimea region in Ukraine and its alleged involvement in eastern Ukraine.

The rouble gained more than 2% against both the US dollar and euro on Monday, helped by the slight recovery in oil prices.

The currency has fallen by almost 30% against the dollar this year.

Russia’s central bank had been spending billions in a bid to prop up the rouble, but said earlier this month that it would limit its intervention.

Source: http://www.bbc.com/news/business-30174650

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