Oil price fall hits the Russian state but not production.
The Russian state is hit first and hardest by falling oil prices, which are down 30% on July’s prices. The state loses over US$2.2 billion per US$1/bbl fall in the Urals price on an annual basis. Upstream producers, however, have been protected by the nearly 40% Rouble depreciation since the beginning of the year. Attached, is a model to show the impact of varying exchange rates on producers with Rouble cost bases.
Table of contents
Oil price fall hits the Russian state but not production
The state loses the most
The Rouble devaluation has helped upstream producers
However in times of fluctuating oil prices the situation is less comfortable