Igor Nikolaev: “the high price of hydrocarbons, we already don’t save”


Игорь Николаев: "высокие цены на углеводороды нас уже не спасают"

Over the years we got used to the fact that the ruble is fairly rigidly tied to the level of oil prices. If more expensive hydrocarbons, the national currency should strengthen. Conversely, when oil prices declined, up went the dollar. That, in General, is logical — the Russian budget is made up based on forecasts of oil prices, the Russian economy still depends heavily on exports of raw materials, despite years of talk about the need to get off the “oil needle”.

However, after the next phase of U.S. sanctions, the introduction of which was announced in early April, we saw something new. The price of oil steadily rising and now exceed $ 72 per barrel (which was not since the recent crisis, 2014), however, the ruble is not strengthened. On the contrary, on the stock exchange it over and over again lost and the dollar and the Euro.

On this occasion, even went out a joke that the current situation, when oil prices rise, the ruble falls, and therefore government revenues in ruble terms increased — just a dream of the Russian government. Something similar, but have earnestly declared Donald trump, according to which, “Russia and China playing the currency devaluation, while the US continues to raise interest rates”.

About what caused such a paradoxical situation with the exchange rate, how long it will last and what will ultimately lead, the Director of the Institute of strategic analysis Igor Nikolaev.

We see what is happening in the oil market. Prices increased to levels of four years ago, however, the ruble, contrary to expectations, this time stronger, and even fell. Although in recent days it lightly and played it drop, bi-directional trend is clear. Than you can explain? The binding rate of the Russian national currency to the price of oil gone?

— No, of course. This binding has not disappeared. As traditionally, when the price of oil is rising, the ruble is strengthened when its price falls, the ruble is weakening, and still is, because the structure of the Russian economy has not changed, it is raw. As before, a significant share of oil revenues is fueling the budget. Due to this situation the fact that the ruble affects not only oil, but also other factors. It turns out that the sanctions, geopolitical tensions also affect him.

Although the factor of geopolitical tension plays a dual role. On the one hand, it pushes oil prices up, and on the other, plays the role of weakening against the ruble. The rouble reacts to the sanctions. It was very revealing.

When off on the eve it became known about new U.S. sanctions against Russian legal entities and individuals, RUSAL, in particular, could see what was happening with our stock market and the ruble. And oil in those days grew very strongly, up to around $ 72 per barrel, but the ruble still fell. That is the factor of sanctions interrupted the impact of higher oil prices on the ruble. Sanctions in this “sparring” are a strong factor.

All this gives serious food for thought. It turns out that oil will not save us. If the sanctions will be strengthened, and with high probability it will, the prospects of the ruble appears to be bad.

On the other hand, the rise in oil prices during the depreciation of the ruble is beneficial for the Russian government in rubles the revenues from this growing. Understand that it will probably be only in the short term, but positively in the long term?

— If we want to relate this situation with the effect of import substitution, not so much. Now is not 1998 (when the crisis led to the collapse of the ruble and the weakening of the Russian exports, which later had a positive impact on the recovery of the Russian economy). If the ruble falls, economy slows: and investment, and consumer spending. Because the fall of the ruble is now not only for Russian consumers, but also for the business community, it is a crisis. Accordingly, the uncertainty in this situation increases dramatically, and then have to wait to see what will happen and the economy is certainly moving backwards. So today the fall of the ruble — not exactly good.

— That is, twenty years ago the fall of the ruble could boost Russian exports, and now this happens?

— While the drop was different and the external conditions were different. Today, we’re likely going to lose the markets of our exports.


— Because of sanctions. Because they themselves intend to impose counter-sanctions. Look what happened to the aluminum market. The Americans have imposed prohibitions that block cooperation with RUSAL with their companies. In order to associate themselves with “toxic”, according to them, the counterparties to sell Russian aluminum stop and the European trading houses, and Japanese companies, for which the us prohibitions did not formally apply. In other words, starts a chain reaction of European and Japanese companies was not forbidden to sell Russian aluminum, but they are beginning to join the sanctions. In this situation the falling ruble will not help us.

— So, did I understand you correctly that this situation, as in the late 90s — early 2000s, when oil prices began to rise, and the ruble has fallen and this stimulated Russian exports, and with it the growth of the Russian economy, today it is impossible?

— I think so, impossible. Then, in the early 2000s was not such a powerful external factor of the sanctions standoff, which neutralizes the positive effect of higher oil prices. The latter, of course, soften the resulting impact on the Russian economy of international sanctions, but to ensure economic growth in the region of 7% per year, as it was in Russia since the mid-noughties — is impossible today.

Alexander Zelenin


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