InoPressa. Iranian oil threatens to sink the Russian economy

After the lifting of international sanctions, Iran is going to pump even more oil in an oversaturated market, which will lead to a further drop in oil prices. The output of Iranian oil to the market exacerbates the problems of Tehran’s competitors, especially Russia, where export of oil is the engine of the economy, writes El Pais. «President Putin has been economically devastated,» commented Die Welt. Libération asks the question: will it mark the beginning of the end of the social contract between the king and the people?

«Iran is going to pump even more oil in an oversaturated market,» — said in the title, The New York Times. Remind journalists Clifford Kraus and Stanley reed, on Monday with Iran were lifted international sanctions, Deputy Minister of oil industry of this country, Rokneddin Javadi declared readiness to increase oil production by half a million barrels a day. It «can exacerbate overproduction of oil, because of which the prices went into a tailspin,» the magazine writes.

Some analysts doubt that the Iranians will be able to issue the promised volume: the limit for an aging oil industry of Iran that is devoid of sanctions, access to import the latest Western technology, there will be additional 300-400 thousand barrels per day. However, the country has huge oil reserves in land and marine storage facilities, which may increase exports in the next few months.

Anyway, according to experts, the next year oil price will remain low.

«President Putin was economically devastated: no other country in the world has suffered so much from falling oil prices, as the Russian Federation. Headache now Putin adds the fact that the international arena is returned to another large supplier of energy resources, which will compete with Russia,» writes economic commentator of the German newspaper Die Welt Daniel Eckert, commenting on the lifting of sanctions against Iran. The news of the lifting of sanctions «dropped» on Monday the price of oil to 27,67 USD per barrel, which was the minimum for the last 12 years.

Tehran plans to increase oil production by 500 thousand barrels per day at present to 2.8 million barrels a day. «As a result, all hope that in the current decade, the quotations will recover quite noticeable melting on the background of transactions with Iran. And for Russia it is actually sad news, because revenues from exports of raw materials account for at least 50% of revenues to the state Treasury, and the drop in oil prices by one dollar means for the Russian state reduced revenues by almost $ 2 billion», — the journalist notes.

Until recently, the Russian budget provided for expenditure on defence, social services and pensions in the amount of about 200 billion euros. Now these calculations have failed. «We have to understand that low oil prices will have long-term character», — declared the Minister of energy Alexander Novak.

In the end currency markets are already «punished» Russia: the beginning of the week the ruble has fallen to a minimum. Another symptom of the crisis — the freezing of foreign exchange reserves, Eckert emphasizes.

«Because of all this, Russia now faces a second year of recession in a row, — the journalist writes, adding that in 2015 the Russian economy decreased by 4%. — Of course, Moscow may partially compensate for the falling oil price depreciating the ruble, but this can be done only partially». Budget cuts, sure the main German strategist Erste Asset Management Peter Szopo, «is inevitable and will fall on the shoulders of private consumption». According to the IMF, the average per capita income in Russia will be reduced from 8400 to 8000 dollars, and this despite the fact that back in 2013, this figure exceeded 14 thousand dollars.

Meanwhile, today, no one speaks of «Gazprom» as one of the world’s largest corporations in the ranking of companies with the largest capitalization he was on a 250-m place — the capitalization fell to $ 40 billion, adds Die Welt. «Sic transit gloria mundi — thus passes worldly glory,» concluded Eckert.

The output of Iranian oil to the market exacerbates the problems of Tehran’s competitors, especially Russia, where export of oil is the engine of the economy, writes El Pais. On Monday, the ruble has accelerated the fall and again broke records, says journalist Pilar Bonet.

Earlier, the government announced that the budget for 2016 must be reduced by at least 10%. Now Prime Minister Medvedev stressed that «additional measures» to increase revenue and more drastic spending cuts. «In search of incomes of the Russian authorities because of its policy in Ukraine was denied access to Western financial markets, plan new taxes for oil companies and the resumption of privatization of state-owned companies,» — said in the article.

«In the circles of the economic elite linked to the Kremlin, is filled with disappointment. This is clearly felt at the Gaidar forum, where he heard disturbing voices and calls to find an exit strategy from the crisis,» writes the author. The head of Sberbank Gref said that the era of hydrocarbons is over, but Russia lost the race for international competitiveness.

«The Russian economy is falling apart» — says in the title of the French Libération, lists the signs of the economic crisis and asks the question: will it mark the beginning of the end of the social contract between the king and the people?

«Putin’s system is based on a tacit agreement between the «king» and the Russian population stability (and prosperity) in exchange for your freedom. Maybe it has exhausted itself. High inflation reduced real incomes of the population, — says the author of the article Ellen Despic-Popovich. — Even the most wealthy people have suffered from the crisis, shows a significant decline in sales of new cars in 2015. The first social protests, such as the shares of truckers, arise in the regions. In the election year of the regime, if he senses a threat to herself, might be tempted still to tighten the nut. Extremely loyal Chechen ally of Putin, Ramzan Kadyrov, went on ahead, urging the authorities to stand trial for sabotaging the opposition seeking to take advantage of the economic difficulties of the country,» the newspaper writes, noting the similarity between the words of the Chechen leader and the terminology of the Stalin era.

Translation InoPressa




InoPressa. Iranian oil threatens to sink the Russian economy 19.01.2016

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