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MOSCOW, October 12. /TASS/. Russian expert community shows no signs of unanimity regarding the likely influence on the world market the United States’ hypothetical decision to lift the embargo from oil expert might have. The probability of such a move grew of late. Some say this is a matter of distant future with no implications for the world market at all. On the contrary, others warn that it will push the price of oil to new record lows.
The House of Representatives of the US Congress last Friday voted for lifting the 40-years-long ban from the export of US crude. A dozen US oil companies had pressed for the decision for a whole year. After the approval by the lower house of Congress the bill is to be endorsed by the Senate. But the initiative may never turn into law, if President Barack Obama uses the power of veto. In the past, the White House refused to support the idea of lifting the ban from the export of crude.
The freeze on the export of oil from the United States has been in effect since 1975, when the Arab countries introduced an embargo on oil supplies to the Western countries in 1973 in retaliation for the support the United States and its allies were providing for Israel.
If the embargo is canceled at last, the United States by 2025 will be able to export up to 2.4 million barrels of oil a day, says a survey by the US Department of Energy. The chief of the Energy Information Administration, Adam Seminski, predicts if the oil export ban goes, the United States might begin to export an estimated one million to one and a half million barrels a day.
"The current trends as they are, the embargo will be lifted sooner or later, possibly, within a matter of months," the online portal Svobodnaya Pressa (Free Press) quotes the head of the finance and economics unit at the Institute of Modern Development (INSOR), Nikita Maslennikov, as saying. "If the embargo is canceled, the world oil prices will nosedive," he says. "It is not accidental the largest investment banks have been speculating that within several quarters the oil price may be down to $30 per barrel or even lower. Clearly, this spells a very hard time for Russia."
The director of the National Energy Institute, Sergey Pravosudov, recalls that the share of import in the United States’ overall oil consumption is above 30%. "The more oil the United States exports, the more it will have to import. The conclusion for Russia is this: the lifting of the oil embargo will have no fundamental effects on the world oil market. So there is nothing to worry about."
The head of the world economy department at the Higher School of Economics, Leonid Grigoriev, is certain that the embargo will surely stay effective at least till the presidential election in the United States. "Even if it is lifted after all, the effects will be felt mostly on the internal US market, and not on the external one," he told TASS. "The US is an importer after all."
"Great supply is tantamount to heavy pressures on the world oil prices. The potential of such a decision, should it ever be made, will be considerable. The already not very high oil prices may slump by five to ten dollars per barrel," Professor Igor Nikolayev, of the Higher School of Economics, has told TASS.
Assistant Professor Ivan Kapitonov, of the presidential academy RANEPA, thinks otherwise. "I don’t believe that the price will go down, first and foremost because the Americans in the first place are not interested in that," he told TASS. "Shale oil reserves in the United States are operating on the verge profitability. The number of drilling rigs is being reduced."
Kapitonov believes that at a certain point the United States will instantly sell up the large oil reserves it has accumulated, which may cause an impact on the world prices. But very soon "only insignificant oil supplies may follow, unable to considerably change the oil market situation towards lower prices in the long term."
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