Oil exports will not stop, but the ruble will fall. On the consequences of the US sanctions against Russia

Marcel Salikhov, President of the Institute for Energy and Finance, gave an interview to Bumaga magazine on the consequences of the US sanctions against Russia.

What will be effected by sanctions the first?

- The main priority in this regard is to support the ruble exchange rate. Because export earnings are the main factor in maintaining the exchange rate: oil exporters receive foreign currency for oil and sell it within Russia, which causes the ruble to grow. Now the flow of export earnings is likely to have decreased, and this is reflected in the exchange rate. It is quite possible that the restrictions on the withdrawal of currency for individuals, which the Central Bank of Russia introduced the day after the US decision, are a warning step to reduce pressure on the exchange rate.

What will happen to the price of oil

— There are two opposite trends. On the one hand, due to the conflict between Russia and the West, oil is becoming more expensive. On the other hand, Russian oil is trading at a deep discount. We can judge about it according to data from price agencies. They are guided by transactions that are actually made.

Will Russia be able to continue selling oil

- Export of Russian oil will definitely not be reset. The largest buyer of Russian oil is China. It is neutral, does not join the position of the West. In addition, Russian oil is bought by the countries of Eastern and Central Europe. They are technologically unable to refuse it - their refineries are connected to the infrastructure of the Druzhba oil pipeline, and, accordingly, they do not have the opportunity to bring other imported oil.

Apparently, there will be a reduction in volumes - now it is quite significant due to the fact that hostilities continue, the acute phase of political confrontation remains. And there will be additional losses due to the fact that discounts have increased.

Will budget revenues fall?

- Following the ruble exchange rate, the pressure will go down the chain - on budget revenues and inflation.

Now oil and gas revenues are more than 40% of the country's budget ones. The budgetary situation as a whole will be changed dramatically not only because of oil. We see a blow to economic activity - both exports and imports are limited, foreign companies are suspending their activities in Russia. And for the same reasons, inflation is rising. Perhaps now the budget will become very scarce. But the reserves will allow to live six months or a year.