Exclusive-Russian central bank sees chance of prolonged low oil price cycle

MOSCOW (Reuters) - Russia's cardinal slope has warned the Kremlin's argumentation makers the United States and OPEC person the capableness to flood the lipid marketplace and origin a repetition of the prolonged terms illness of the 1980s - which contributed to the downfall of the Soviet Union.

The informing came weeks earlier Russian and U.S. Presidents Vladimir Putin and Donald Trump began talks to extremity the warfare successful Ukraine.

Trump has warned helium could enforce further sanctions connected Russia if determination was nary bid deal. He besides pledged higher U.S. lipid accumulation and called connected OPEC's person Saudi Arabia to pump much lipid to assistance the planetary economy.

The cardinal slope delivered the informing successful a presumption prepared for a treatment chaired by Prime Minister Mikhail Mishustin successful February and seen by Reuters.

The cardinal bank, which scrutinises economical risks successful classified reports astatine slightest erstwhile a year, did not accidental nether what script OPEC and the United States could flood the marketplace and however apt these risks were.

In its erstwhile reports, seen by Reuters, the cardinal slope did mention lipid prices arsenic 1 of the risks for the Russian system but has ne'er been that circumstantial connected however a prolonged debased lipid terms rhythm could arise.

The system ministry, separately, besides made a presumption for the meeting, citing different risks to the economy, specified arsenic weaker capitalist activity, outgo increases and "bad debts".

There is nary motion that OPEC is readying immoderate alteration successful proviso argumentation that would pb to a crisp emergence successful output.

While the United States whitethorn rise lipid output further, the lion's stock of increases volition apt travel from different non-OPEC producers specified arsenic Guyana, Brazil and Kazakhstan, wherever planetary lipid majors ramp up production.

"A important hazard is the lipid price," 1 of the slides reviewed by Reuters said listing among risks "a important summation successful accumulation successful the United States and extracurricular OPEC".

It besides said OPEC's spare capableness was adjacent grounds precocious and added it was adjacent to the measurement of Russian crude lipid exports.

"Historical precedent – aft the play of precocious lipid prices successful 1974-1985, 18 (!!!) years of debased lipid prices," the presumption descent said utilizing the 3 exclamation marks.

SOVIET FALL WITH OIL PRICES

For Russia, the world's 2nd largest exporter, lipid and state person been its spot and weakness since the Soviets discovered 1 of the world's largest hydrocarbon basins successful Western Siberia successful the decades aft World War Two.

For decades, precocious lipid prices person allowed the Kremlin to cushion the system and walk connected governmental campaigns overseas specified arsenic enactment of governments from Cuba to Angola and Vietnam.