Vladimir Putin: powerful oil price correction will mean a real economic shock

Russia’s President Vladimir Putin believes that powerful oil price correction may take place at some moment and it will mean a real economic shock. Such disturbances do not benefit anyone, says Putin and calls global oil market players to combine effort for stable development.

In an interview to the Egyptian Al Ahram daily in the run-up to his visit to Cairo, the Russian president said the major risk posed by dropping oil prices is that the oil and gas industry becomes less attractive for investors.

“They have to abandon developing technologically complex oilfields and infrastructure development projects, and, as a result, oil supply on the market will gradually but inevitably shrink. It means that at some moment there may be a powerful price correction in the opposite direction that will mean a real economic shock,” Putin elaborated.

The Russian president also noted that the Middle East region is facing new challenges and an adequate response to them will require additional resources. This is why in the Middle East there is a growing understanding that the oil market should be stabilized and demand balanced with supply, he said. Commenting on the influence of oil prices upon the Russian economy, he reminded of 2008-2009, when the country was facing similar problems.

“Just like then, Russia has accumulated substantial reserves which enable us to cope with the effects produced by negative factors,” he stressed.