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Expert sees possibility for Russian economy restructuring

December 31, 2015, 10:27 UTC+3 LONDON
According to an international trade expert with the London School of Economics, long term low oil prices may actually help Russia rebalance its economy away from oil and mineral dependency
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© Artiom Geodakyan/TASS

LONDON, December 31. /TASS/. Low oil prices may help Russia rebalance its economy away from mineral and oil dependency, international trade expert with the London School of Economics Julius Sen told TASS.

It is difficult to make a forecast of oil price dynamics for the next year because "the issue is so political," the expert said. "Russia is currently excessively dependent on oil and mineral revenues. If Russia can cope with rapid economic diversification, then long term low oil prices may actually help Russia rebalance its economy away from oil and mineral dependency. The difficulty is to do this when there is a sudden movement in oil or mineral prices," Sen said.

It is impossible to say whether productivity increase by Saudi Arabia up 1.5 mln barrels a day can destabilize the global oil market, the expert said. "Saudi Arabia is only one producer - the biggest - but not the only major producer. A lot depends on political developments in Iran, Iraq and elsewhere. The key to whether an oil price is destabilizing is if it keeps fluctuating. If it fluctuates dramatically, then it is destabilizing. If it remains at a constant rate, however low, then economies and businesses can plan around it," the expert added.

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