As you probably know, oil prices continue their way down to new major lows driven by multiple factors like China’s economic slowdown and Iran’s comeback to the international market of crude oil as a major player along with the USA, which recently saw the oil export ban canceled.
Apparently, no oil exporter wants to see low oil prices. Russian is not an exception. Some experts say that Russian oil exporters now have to sell oil below production and transportation costs, which makes their business unprofitable at this point.
Yet, the situation may get even worse. The thing is that Saudi Arabia doesn’t conceal the fact that it is going to continue the price war aimed at preserving its market share while ousting the rivals. The only thing that may reverse the trend at this point is an agreement between OPEC members implying oil production cuts within the cartel. However, the probability of such a scenario is close to zero for now.
As for Russian oil, its export is now unprofitable mainly at the expense of high transportation costs on top of production costs. The international expert community seems to have revised its oil forecast for 2106 by downgrading it from $50/b to $30/b on average. Most experts believe that oil prices are definitely not going to recover this year mainly due to fairly big oversupply and overproduction.
