“We believe that the market will correct itself,” he told Rossiskaya Gazeta in Sochi, “and that the current fall in prices will actually have a beneficial effect, in part because cuts will be focused on expensive, ineffective projects.”
Novak also gave reassurances that Russia, having calculated next year’s budget on the basis of $100 a barrel, would not experience budget problems due to the decreased price. “We also don’t see a problem in this regard, since such a price calculation amounted to a budget surplus, which would ordinarily be sent to Russia’s National Wealth Fund.” Correspondingly, without such a surplus in 2015, the Fund would not be boosted.
On Thursday, Rosneft chief Igor Sechin gave a lower estimate of $70-75 a barrel in 2015, but said that he expected the price to start rising in the second half of 2015. “Nothing tragic is happening in the oil market,” he declared, adding that in the longer term the growth of oil supply against demand would slow.