Russia faces growing losses as downward oil price trend shows no signs of stopping – energy expert

He shared his opinions live on Espreso TV.

"The downward trend will persist, as reports have already surfaced indicating that OPEC member states are now canceling oil production quotas. As a result, they are ramping up production faster than previously agreed. This move aims to push out competitors in the global oil market and increase their own oil sales to compensate for declining prices," the energy expert explained.

According to him, Saudi Arabia has lowered prices for its Arab Light oil brand for all its consumers, not just those in Asia. This shows that supply in the oil market is growing, while demand is dropping. There are fewer and fewer reasons for demand to grow. Exporters understand that if they don't capture as much of the market as possible now, they won't meet their budget plans. Foremost, this concerns Saudi Arabia, so the Saudis are pushing to sell more oil, and for that, they need to lower prices.

"Such a policy is good for those who have low production costs – around $10 per barrel – so the main thing is to sign new contracts. That's what Saudi Arabia, Kuwait, the UAE, and others are doing successfully right now. By the way, Kazakhstan, although a smaller oil exporter, is not far behind – it has basically pulled out of the OPEC+ agreement and is rapidly boosting its production. Today, everyone is fighting and competing for the world market, which is bad for Russia because its oil companies probably have the highest production costs. So the further this goes, the worse Russia’s position will be, and it will create big problems for its federal budget. Even today, when prices haven’t fallen back to March levels, Russia is already losing about $40 million a day on oil sales," Ryabtsev said.

• In April, reports showed that Russia’s oil revenues dropped to their lowest level since mid-2023, as exports fell for the third straight week and oil prices slipped amid the trade war between the U.S. and China.
• Earlier, Andriy Zakrevskyi, deputy director of the Energy and Natural Resources Association of Ukraine, said that Brent oil would likely hit $60 per barrel by the end of this year.