MOSCOW - Russia is fiscally prepared to cope with a drop in oil prices, Finance Minister Anton Siluanov said on Thursday, as OPEC tries to convince Moscow to support the market with a deeper output cut in the wake of the coronavirus outbreak.
The Organization of the Petroleum Exporting Countries agreed on Thursday to cut oil output by an extra 1.5 million barrels per day in the second quarter of 2020 to support prices, its largest reduction since the 2008 crisis, but made its action conditional on Russia and others joining in. He said Russia had become less exposed to fluctuations in the oil market, but reducing the country’s reliance on its main export was not something that could be achieved quickly.Russia in 2018 introduced a mechanism designed to shield it from economic consequences such as those seen in 2014 when, along with Western sanctions, falling oil prices hit the economy and the rouble.
Strict budgetary rules stipulate that Russia can only spend funds from its NWF when its reserves exceed 7% of the country’s GDP.