Leonid Zlotnikov: Belarus To Get Nothing From Improvement In Oil Prices

The increase in world oil prices will be short-lived.

With that Belarus will not be able to get a win even from this short-term increase in energy prices. Economist Leanid Zlotnikau said that to Belarusian Partisan. According to him, the increase in world oil prices will be short-lived.

"The fact is that once oil prices increase by at least $ 5, a strong counteracting to their growth arises – it becomes profitable to run the wells, extracting shale gas and oil. As soon they begin to produce shale oil, the oil supply in the world market becomes high, and the prices are falling. Therefore, we cannot expect that the price will return to the mark of 100, or even $ 70 per barrel," – the economist says.

According to the expert, in the near future, oil prices will fall even lower than they were prior to the OPEC’s decision to cut oil production.

"The OPEC’s decision is a significant event, and the market usually strongly reacts to significant events. So it was with Brexit, and with Trump’s unexpected victory. But then, over time, it all "settles down". The same situation will be with oil prices. Today, oil prices have increased up to $ 55, tomorrow they are likely to rise a little, but in a month they will drop to $ 50 or even lower. The fact that the new US President set a task to fully cover their domestic oil needs from their own sources (and the United States has some of the world's largest oil reserves, but at the moment the majority of wells are frozen) and become a net oil exporter. Therefore, in a few months, oil prices will drop again and will fluctuate in the range of 40-45 dollars per barrel," – Leanid Zlotnikau said.

Belarus will not manage to take advantage of even this short-term rise in oil prices, the economist says.

"The situation today is not the same, as it was a year or two ago. Russia is carrying out a so-called "tax maneuver" – reduces on its oil export and increases the tax on extraction of mineral resources, including oil. This tax will be increasing as a result of reducing export oil duties, and Belarus received its income out of these duties. Therefore, a slight increase in oil prices will be dampened by the oil duties. As a result, Belarus will receive almost nothing from the oil price increase," – Zlotnikau says.

It is to be recalled that last week, the OPEC countries agreed to reduce oil production significantly. As a result, the oil price has risen by 8 dollars and exceeded the level of 55 dollars per barrel for less than a week.