The Russian economy is highly dependent on the prices of petroleum products, since the main profit goes to the treasury from the extraction, processing and sale of oil. In 2012, the cost per barrel is steadily creeping downward. What is the reason for this?
The cost of oil depends on political, economic and other factors. With an increase in production and an overabundance of reserves, the price per barrel invariably decreases. If at the same time there is a general economic and industrial decline, the level of consumption falls. This has a significant impact on the price.
The largest oil exporters include 12 countries that are members of OPEC (Organization of Petroleum Exporting Countries). This organization stands for the protection of exporting countries: Venezuela, Saudi Arabia, Iran, Iraq, Qatar, United Arab Emirates, Nigeria, etc. An oil production quota helps to prevent oversupply and to maintain reasonable prices. As soon as quotas increase, the oil price goes down almost instantly.
Russia is not a member of the OPEC cartel, so it forms oil prices independently. But a sharp increase in hydrocarbons by non-OPEC countries: Africa, Latin America, leads to an overall decrease in the cost of oil products.
Internal political instability in any country that is a major oil exporter leads to a sharp increase in hydrocarbon prices. The stabilization of the domestic political situation is again helping to lower oil prices.
The global world crisis leads to a general economic recession. This invariably entails a change in production, consumption of hydrocarbons, and accordingly directly affects prices. Against the backdrop of the crisis, overproduction occurs, which in turn leads to an oversupply of stocks. The cost of a barrel goes down immediately.
Most often, a combination of economic and political reasons leads to stable changes in hydrocarbon prices.
In 2012, there is a worldwide decline in production, a surplus of production and colossal reserves of hydrocarbons, an increase in production quotas by the largest exporting countries. All this inevitably led to a drop in oil prices.
