Russian Central Bank warns of risks for oil to drop to $35

A risk scenario of the Central Bank of Russia stipulates a ruction in oil prices down to $35 per barrel.

Ksenia Yudaeva, first deputy chairwoman of the Central Bank of the Russian Federation, said during her speech speech at the Council of Federation that the bank proceeds from its forecasts, in which Western sanctions against Russia are not going to be lifted. The risk scenario is based on expectations for the sanctions ti be tightened further during the upcoming years, while prices on oil are going to decline sharply.

In the beginning of October 2018, the cost of a barrel of Russian Urals oil was fluctuating above the level of $80. The basic scenario of the Central Bank of Russia suggests the reduction of the cost of a barrel of Urals oil to an average of $55 in 2020-2021. For the risk scenario, the cost of a barrel of Urals may halve already in 2019. Such a decline will speed up inflation and halt the growth of Russia's GDP.