Russia » Economics

YUKOS head forecasts fall in oil prices - 10 April, 2003

Russian businessmen working in the oil sector are concerned about the future of oil prices after the end of the war in Iraq. Forecasting the possible dynamics of oil prices, head of the Russian oil company YUKOS Mikhail Khodorkovsky noted that oil prices would go down to about $16 to $18 per barrel and would stay at this level for a year and a half or two years. Another possible scenario will be a plummet in oil prices to $12 per barrel, the YUKOS head predicted. According to estimates released at a Cabinet meeting, with oil prices at $12 per barrel, the Russian budget will face a deficit of 445bn rubles (about $14.23bn at the current exchange rate, or 2.9 percent of the GDP) in 2004. At the same time, Khodorkovky noted that the sharper the fall in oil prices would be, the sooner they would return to previous high levels, the Kommersant newspaper reported.