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Russia Braces for Prolonged Oil Price Slump: Economic Risks on the Horizon!



Russia’s Central Bank has issued a cautionary statement highlighting the potential for a prolonged period of low oil prices due to increased production from the U.S. and other non-OPEC countries like Brazil and Kazakhstan which has significantly impacted the Soviet Union's economy.  This caution was highlighted in a presentation by Prime Minister Mikhail Mishustin, which reflected concerns about global supply trends impacting Russia’s oil-dependent economy.

The bank’s forecast anticipates Brent crude oil price a decline from previous years, averaging $60 per barrel in 2025. However, this prediction remains uncertain as the accuracy depends on the significant production growth outside OPEC. The oil executives have resisted ramping up production at current price levels even though the U.S. President Donald Trump has vouched for energy dominance and lower domestic energy costs. According to the latest Dallas Fed Energy Survey, the industry leaders express skepticism over major production increase, citing high operating costs and market volatility suggesting the oil price oil prices need to be at least $75–$80 per barrel to stimulate further drilling activity.

As for Russia, the situation remains complex. Even if Russia’s actual production level remains the same, any discussions around lifting sanctions could temporarily drive oil prices lower. Ironically, sanctions may be supporting higher oil prices for both Russia and the U.S. in the current market condition. With ongoing geopolitical uncertainty, Russia must navigate these challenges carefully to avoid any economic uncertainties.


Source : https://oilprice.com/Energy/Oil-Prices/Russias-Central-Bank-Warns-of-Prolonged-Oil-Price-Slump.html

 https://www.reuters.com/markets/europe/russian-central-bank-sees-chance-prolonged-low-oil-price-cycle-2025-03-24/


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