Russia: Exports and imports nosedive, price for Ural oil remains on free fall
December 31, 2014
In November, exports totaled USD 37.6 billion, which represented a 19.7% decrease compared to the same month of the previous year. The reading followed the 6.9% contraction observed in October and marked the fourth consecutive month of contraction and the sharpest fall since October 2009. Meanwhile, imports recorded the 14th consecutive month of decline, contracting 22.1% annually in November (October: -12.4% year-on-year). The reading recorded the sharpest fall since October 2009.
The trade surplus totaled USD 14.4 billion in November, which was smaller than the USD 17.0 billion observed in the same month of the previous year. In the 12-months up to November, the trade surplus narrowed to USD 193 billion, which came in below the USD 196 billion surplus recorded in the 12 months up to October.
Global oil prices have fallen sharply over the past seven months, having a significant impact on the price for Ural oil, which is Russia’s key export commodity. On 30 December, the Ural oil barrel traded at USD 53.4, which was 25.3% lower than the same day of the previous month. Compared to December 2013, the price of Ural oil lost half of its value. According to the World Bank, Russia loses about USD 2.0 billion in revenues for every dollar drop in the oil price. Despite expectations that oil prices will remain low this year, Russian authorities had confirmed that the country will not reduce oil output. Meanwhile, the Russian Central Bank published its assessment of the country’s economic outlook, where it envisioned two scenarios. Under a baseline scenario, the Banks expects the price for Ural oil to average USD 80.0. Under a worst-case scenario, the Bank sees oil prices averaging USD 60.0.
Author: Ricardo Aceves, Senior Economist