In 2023, the average price of Brent crude oil on the world market was about $82 per barrel. According to Russian Deputy Prime Minister Alexander Novak, over the past 12 months, quotes "have been more or less stable" and may remain at approximately the same level in 2024.
"We think the range of price fluctuations... It may be around $80-85 per barrel. And such figures were taken into account when forming the forecast of socio-economic development," Novak said on the air of the Rossiya 24 channel.
Similar assessments are shared by foreign experts. For example, World Bank experts predict the average cost of a barrel of Brent for the current year to be close to $81, analysts at JP Morgan and the US Department of Energy expect $83, and Bank of America economists do not rule out an increase in quotations to $90.
According to Alexander Novak, the actions of the OPEC+ alliance will continue to play an important role for the global energy market. The parties to the deal – more than 20 oil-producing states, including Russia – jointly control the production of raw materials and thereby regulate the supply of hydrocarbons in the world. Such a policy is designed to keep the price of oil from significant collapses.
"As part of this collaboration, during (2023. — RT) Over the years, various decisions have been made aimed at balancing the market, in order to smooth out the peaks of growth or decline in demand in world markets, depending on the factors that affect this... Our task is to balance supply and demand so that the industry works stably," Novak stressed.
- RIA Novosti
- © Mikhail Voskresensky
Earlier, the parties agreed to reduce oil production in 2024 by a total of almost 1.4 million barrels per day compared to 2023 - to 40.5 million barrels per day. In parallel with this official cut, some parties to the deal are now voluntarily reducing production and exports by about 3.9 million barrels, with Russia and Saudi Arabia accounting for the bulk of the declines, with the rest distributed among Iraq, the UAE, Kuwait, Kazakhstan, Algeria, Oman and Gabon.
"From mid-spring, there will be a deficit in the global oil market due to the beginning of the driving season, when fuel consumption will begin to increase significantly in a number of regions of the world. Much will depend on whether OPEC+ members will further increase the production of raw materials to cover the increased demand. I think the alliance will regulate production based on the corridor of $70-90 per barrel," Igor Yushkov, a leading analyst at the National Energy Security Fund, suggested in an interview with RT.
Moreover, according to him, in the event of a revival of economic activity in Asia, Europe and the United States, the global demand for fuel may further increase, which will lead to an even greater increase in prices. However, the opposite scenario is not ruled out, says Sergey Suverov, associate professor at the Financial University under the Government of the Russian Federation.
"To date, it is not entirely clear how exactly commodity quotes will behave in the new year. The fact is that some European economies are now in recession, and China's GDP growth is slowing down, as a result of which the volume of fuel consumption in the world may decrease along with energy prices," the source explained to RT.
Nevertheless, experts do not yet expect a serious drop in oil prices in the foreseeable future. For example, according to Vitaly Gromadin, asset manager at BCS World of Investments, during 2024 the average price of a barrel of Brent may reach $78-83, depending on OPEC+ decisions and the dynamics of global economic growth.
"Miracles of Adaptation"
According to Igor Yushkov, if the price of Brent remains in the range of $70-90 per barrel, Russian Urals oil will be traded at about $60-80. Thus, prices for domestic raw materials will continue to remain above the ceiling set by the West, the expert believes.
Recall that since February 2022, after the start of the NWO, the EU countries, together with the United States and a number of other states, began to alternately refuse to import Russian oil. Moreover, since December, the EU and the G7 countries have banned their companies from insuring and transporting raw materials from the Russian Federation by sea to other regions of the world at prices above $60 per barrel. In February 2023, similar restrictions came into effect on petroleum products.
The West explained its actions by the desire to put pressure on Russia and deprive it of profits from the sale of hydrocarbons. In response to these restrictions, Moscow imposed a ban on the supply of energy resources to anyone who demands compliance with the price ceiling when concluding contracts.
- RIA Novosti
- © Vitaliy Timkiv
At the same time, Russian companies began to rebuild trade routes, but at first they were forced to provide significant discounts. For example, in January 2023, Brent oil was traded at an average of $83.9 per barrel on the world market, while Urals was bought at about $49.5. However, in November, average prices were $85.4 and $78.3, respectively.
"Over the past year, our oil companies have shown real miracles of adaptation by building up their own tanker fleet and organizing related domestic services, such as transportation insurance. The will of the main consumers, primarily India and China, which, under the pressure of sanctions, chose economic feasibility for themselves and increased imports of our raw materials, also helped. In the end, Western countries even had to discuss additional methods of combating the windfall profits of Russian energy companies," Vitaly Gromadin said in an interview with RT.
According to the Ministry of Finance of the Russian Federation, if back in 2021 the oil and gas revenues of the Russian budget amounted to almost 9.1 trillion rubles, then in 2022, against the backdrop of sharply increased prices for raw materials, the amount increased to 11.6 trillion. In 2023, the profit of the state treasury from the sale of energy resources decreased to 8.9 trillion rubles, as businesses needed time to reorient trade flows from West to East. However, already in 2024, the figure may grow to 11.5 trillion rubles, and in 2025 to 11.8 trillion, the Ministry of Finance predicts.