Russia will not wage war with OPEC
Pyotr Netreba RIA Novosti Moscow
OPEC threatened Moscow with a price war, having demanded that it should stop increasing its oil export. In the Russian government Commersant was assured that it is not going to wage war but will not immediately declare capitulation either.
At the end of last week president of OPEC Rilwanu Lukman stated everywhere he could that the international cartel does not intend to limit its own oil export for maintaining stable prices on this market while the Russians keep boosting production.
Lukman even threatened with a price war (of course, with the reservation that OPEC itself does not want this war because it will certainly win it but the stubborn Russia can force the cartel to fight). Moscow's reaction to these statements was reserved. Deputy head of the government administration Alexei Volin officially commented to Commersant on Lukman's statements as follows: "Russia has not declared price wars on anyone and is not interested in these wars."
No official of either the Ministry of Finance, or of the Ministry of Economic Development and Trade, questioned by Commersant, publicly spoke of a threat to the economic development and to the execution of the budget for 2003.
In the Ministry of Finance they said unofficially that the budget for 2003 is calculated proceeding from the average annual oil price of US$18.5- $21.5 per barrel. And at the present time no one intends to revise this forecast made by the Ministry of Economic Development and Trade.
The forecast is confirmed also by other authoritative international experts, for instance, of the IMF. "And if the experts have not refuted themselves so far this means that they deem a price war of Russia with OPEC to be unlikely or the consequences of this war to be negligible," a source in the Ministry of Finance stated.
At the June 18 meeting of the government Minister of Economic Development and Trade Gherman Gref said that the Russian export of oil has been really growing fast - it is to increase by approximately 9 per cent in 2002. By his calculations, the world prices of the Urals brand oil stood at $19.7 per barrel on average in the first quarter, and at $23.6 in the second quarter. Mr. Gref also announced that before the end of 2002 "given the policy of the oil producers is agreed upon, no dramatic changes of the oil prices are expected." But, according to his calculations, "a change of the oil price by one dollar will cause a change of the budget revenues by $1 billion and a change of the growth rate of the GDP by 0.3 percent."
For this reason, Gherman Gref proposed viewing the price of $18.5 per barrel as a pessimistic variant in 2003, and planning a growth of oil export by 3.6 percent, and in the optimistic variant - increasing export by 8.1 per cent with the price ranging within $21-$23.
As a matter of fact, as Gherman Gref has already confirmed by his calculations, the government has already learnt how to reach agreement with OPEC in such a way as not to affect seriously Russia's own export of oil. Thus, in spite of the self-limitation of oil export by 150,000 barrels a day accepted by Mikhail Kasyanov for the period from last January to May, export all the same kept growing in 2002.