Russian expert announces oil market forecasts on outcomes of 2018 and next year

Baku. 18 December. REPORT.AZ/ "If Iran does not take unusual step in 2019, the oil price won’t go up. As for decline in price, the oil price will not be below $50 as long as OPEC+ operates," Senior expert at Russia's National Energy Security Fund and Institute of Finance under the government Stanislav Mitrakhovich said.

The expert told Report that this price is more favorable for unconventional oil producers in the US.

"If the prices are drop below the current ones, it will be for a short-run because US oil producers and those allocating loans for them may face great damages," the expert said.

Senior expert at Russia's National Energy Security Fund and Institute of Finance under the government Stanislav Mitrakhovich

"The increase in US production revealed that old OPEC cannot regulate the developments, and there is a need for OPEC+".

Stanislav Mitraxoviç

Senior expert at Russia's National Energy Security Fund and Institute of Finance under the government Stanislav Mitrakhovich

Commenting on the state of the oil markets for 2018, the expert said that this year was successful for both producers and consumers: "The prices were growing in the first half of  the year, especially in the summer. In spite of decline later on, it did not fall to a level that could be dangerous for producers, of course, except for the countries such as Venezuela, which is now in a difficult situation due to failures in the domestic policy. Generally, the atmosphere of this year was set by the US impact and boundaries of this impact were defined."

Reminding that US ranked 1st for oil production, Mitrakhovich believes the increase in US production revealed that old OPEC cannot regulate the developments, and there is a need for OPEC+:

"OPEC also had to change its plans. Though OPEC+ countries thought they could increase production due to the situation in Venezuela and Iran, they were obliged to impose limitation. And while the United States increased production, OPEC+ had to take important steps."

According to him, despite the year 2018 was more affected by US, it also had a certain limitation: "The United States did not want to confront the countries importing Iranian oil, thus they made obvious concessions for them."

Senior expert at Russia's National Energy Security Fund and Institute of Finance under the government Stanislav Mitrakhovich

"The United States did not want to confront the countries importing Iranian oil, thus they made obvious concessions for them".

Stanislav Mitraxoviç

Senior expert at Russia's National Energy Security Fund and Institute of Finance under the government Stanislav Mitrakhovich

As for extensive forecasts for the next year, the expert said the US will continue to increase production: "If the Iran-US conflict escalates, it will pose a threat on a greater part of transportations in the Persian Gulf, and the countries intending to sell oil instead of Iran will benefit from this situation."

"To my mind, Donald Trump will not stiffen the sanctions because it may cause differences with many other countries. If the United States acts this way, then Iran may take more serious steps and even launch military operations in the Gulf. In this case, there will be a useful scenario for oil producers such as Russia, Azerbaijan, Kazakhstan, Norway, which are able to compensate Iranian oil," the expert said.