Prior to his working trip to Pskov, Vladimir Putin held a meeting at the Vnukovo 2 airport terminal.
The discussion focused on the most pressing international issues – the spread of the coronavirus, trends in the global economy and the situation in the oil markets.
A number of federal ministers and heads of Russia’s leading oil and gas companies took part in the meeting.
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President of Russia Vladimir Putin: Good afternoon, colleagues,
We know well that global financial and commodity markets are very sensitive to world-scale events.
In all appearances, we are witnessing exactly such a reaction on a global scale to what is happening with the so-called coronavirus. We have repeatedly stated that Russia is doing everything it can to fight this dangerous disease and that appropriate measures have been taken. I hope they will prove to be efficient. The situation is generally under control.
As for the impact of the coronavirus outbreak on the economy, here we need to specifically focus on how to react to what is happening in this regard. This is the reason why I wanted to meet with you, with heads of our top oil and gas companies, to discuss how we are going to react to the developments in the global economy in connection with this coronavirus.
The negative consequences are already evident and affect the entire system of the global economic relations, virtually all countries because today the economies are highly interdependent and interconnected.
In the People’s Republic of China, which, as you know, was the first to confront the spread of the disease, business activity indexes published on Friday went beyond lows seen during the 2008 global crisis.
In turn, world stock indexes fell by over 10 percent. In this regard, the past week was the worst for global markets since the 2008 crisis.
It’s no surprise that against the backdrop of problems in the world’s leading economies and overall decline in demand, Brent crude oil dropped down to $50 per barrel by the end of the week. Let me remind you that it was at $70 per barrel at the start of the year.
It is certainly hard to predict how this trend will turn out in the long run, however, we must be prepared for all possible scenarios. I want to stress – the current oil prices are acceptable for the Russian budget and our economy. Let me remind you that our macroeconomic policy this year is based on a Brent crude oil price of $42.4 per barrel.
Moreover, our accumulated assets, including the National Welfare Fund, are sufficient to ensure a stable situation and that all budget and social commitments are met even if the situation in the global economy deteriorates.
The Central Bank Governor will correct me [if I am wrong] but I think the Bank of Russia has $563 billion in international reserves while the National Welfare Fund has $124 billion, which is 7.87 trillion rubles. Nevertheless, all this does not remove the need for our joint actions including with our foreign partners.
A meeting in the OPEC+ format will be held in Vienna next week. This mechanism, which we established with other leading oil producing nations, has already proved to be an efficient tool for ensuring long-term stability in the global energy markets. It has given us additional budget revenues and – this is key – offered possibilities for our oil extracting companies to invest in promising development projects.
I already said at the beginning that I wanted to hold this meeting in order to discuss this situation with you and hear your opinions on identifying further steps necessary to balance the global hydrocarbon markets.