A warning by Russian officials state crude oil will further drop if the vote to exit the European Union from Britain is accompanied by a boost in production.
Disturbed by recent mishaps, Canada and Nigeria are back in business. If combined with the Brexit result, “the drop in prices in the short-term may be serious” and if supply isn’t restored, a return to fundamentals is likely to follow quickly, states Alexander Novak, Russian Energy Minister.
After a major recover in January, global benchmark Brent crude dropped 6.6% after these results were released. Russia’s largest producers, Rosneft PJSC and Lukoil PJSC, also experienced share devalue.
Novak continues, “If EU members begin to quit the union then this may have a significant consequences for the rate of economic growth and as a result affect the price of oil. Then the consequences will be very hard to predict”, creating a possible “domino effect”.
Article written by HEI contributor Marcela Abarca.