Resilient Russian Big Oil Gives Putin Leverage With OPEC
- Nation’s crude producers comfortable with oil above $50: Fitch
- Tax system, weaker ruble are a hedge against falling prices
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On the eve of oil talks between President Vladimir Putin and Saudi Crown Prince Mohammed Bin Salman, Russian crude producers are showing why their leader can afford to drive a hard bargain.
The most recent financial data from companies including Rosneft PJSC and Lukoil PJSC show an industry that has little to fear from oil’s plunge back into a bear market. Thanks to low production costs, plus the natural hedge of falling taxes and a weakening ruble if prices drop further, they could withstand years of cheap crude, according to analysts from Citigroup Inc. to Renaissance Capital.