Tainted oil hits on Russian economy
However, this will not change the ruble exchange rate
/NOVOSTIVL/ Russia suffered a $1 billion shortfall in export revenues in the first two weeks of May after the discovery of contaminated oil disrupted pipeline flows to Europe, a Reuters calculation showed. This article appeared in the Reuters.
The final cost of the contamination may be several times higher, economists said, but it seems unlikely at this stage to dent the country’s already fragile growth prospects or rock the rouble.
Crude export flows have been disrupted since April, when high levels of organic chloride were found in oil pumped via Russia’s Druzhba pipeline, which serves Germany and some eastern European states.
There has been no official Russian estimate of the cost impact. In mid-May, Energy Minister Alexander Novak put the overall damage caused by dirty oil at below $100 million, but it was not clear exactly what he was referring to.
Reuters based its $1 billion estimate on export figures from sources familiar with energy ministry data and average monthly oil exports via Druzhba from last year, adjusted for changes in global oil prices.
Sources said that, compared to average April levels, Russia’s pipeline system cut oil intake by 6% between May 1 and May 16.
Russia should be able to compensate for shortfalls by selling the tainted oil at a discount and getting more petrodollars from other oil exports thanks to recently increased crude prices, analysts said.