Iranian Oil Worsens Prospect of Russian Supplies

Iranian Oil Worsens Prospect of Russian SuppliesIranian Oil Worsens Prospect of Russian Supplies

Prospects for Russian energy supplies to the key markets are unfavorable, the country’s Central Bank said.

“Once Iran sanctions were removed in early 2016, its supply of crude oil to China increased from 410,000 barrels per day in January to 675,000 bpd in April 2016,” Russia’s Central Bank said in a report, Sputnik News reported.

The bank stressed that Russia also managed to boost its oil supplies and enhance its position on the Chinese and the European markets.

However, the recent slump in oil prices is expected to result in yearly revenue cuts of $180 billion, according to a senior official at the Russian Finance Ministry.

“Oil price has fallen from $100 to about $50 per barrel. This would result in a decrease in Russian export revenues of $180 billion a year,” Maxim Oreshkin, the head of the ministry’s Strategic Planning Department, told a meeting in the Federation Council, the upper house of the Russian Parliament.

Earlier, the Russian central bank estimated revenue losses at $160 billion per year if oil prices remain around $45 per barrel.

“The main task of the government is to alleviate the shock and to help the economy reach a new balance as soon as possible,” he said, also pointing out the “spiraling inflation”, which recently rose to about 16% in annual terms, as the principal challenge to the economy.

Russia, one of the largest oil producing nations, has been hit by the fall in oil prices, declining by more than 50% since June 2014. In addition, the country faces western sanctions in connection with the political row over Ukraine.