According to a report by the news agency Reuters, which claims to have seen a closed presentation prepared by the Russian Central Bank for Prime Minister Mikhail Mishustin, the bank is concerned that a repeat of the prolonged oil crisis of the 1980s may occur due to the policies of the US and OPEC.
The presentation is said to mention that the oil price is a significant risk and alongside other risks, it notes an “substantial production growth in the United States and outside of OPEC.” Additionally, it is stated that OPEC’s reserve capacity is near a record high and matches the volume of Russian oil exports.
Reuters further reports that the Central Bank at least once a year analyzes economic risks in closed reports, but has not yet provided any forecasts on what a prolonged period of low oil prices could cause.
The news portal RBK notes that oil prices in the 1980s suddenly rose to a level never seen before in that time: from $3 per barrel in the early 1970s to $35 in 1981. RBK explains that this was the result of several geopolitical shocks of the time, including the Arab oil embargo, the Iranian Revolution and the Iran-Iraq conflict. The extremely high price was an incentive for the exploration of new oil fields and led to an overproduction, which resulted in a price decline. In this situation, the USSR alone lost $20 billion (7.5 percent) of its export earnings in 1986.