REUTERS
Russia's Finance Ministry is considering a scenario when crude oil prices may plunge as low as $20 per barrel, but predicts this won't last long.
"This is a scenario for a short period, and it's clear it won't last for three years," Deputy Finance Minister Maksim Oreshkin told Rossiya 24 TV Channel, according to Russian news agency TASS.
Yet, he said, experts claim that this scenario is hardly probable, but even if it happens, "events on the oil market will be unfolding very swiftly, and the market will see a balance immediately," he said.
The price of crude oil set at $50 per barrel could be taken as the base-case scenario in the near-term outlook, Oreshkin said.
A short decline in crude oil prices is possible amid a glut of production.
"Excessive crude oil reserves, redundant oil [production] capacities at least in certain regions may trigger a serious, short-term decline in oil prices," he said, noting that $20 per barrel is the level when costs are higher than profit.
"A decline to that level will translate into the physical closure of certain oil fields. These will be forced measures. And amid such a tough regime, the market will start to adjust itself to a new level of production in order to meet demand," he said.
As UNIAN reported, Bloomberg forecasts that crude oil prices may go down to $22.5 per barrel, and the Russian financial system will break up.