Lukoil sees agreements on Syria, Iran putting pressure on oil prices
MOSCOW. Aug 14 (Interfax) - A dramatic increase in the supply of oil due to the development of shale deposits in the United States, the oil sands in Canada, deepwater fields and traditional fields in the Middle East, the lifting of the embargo on Iran, growth of production in Iraq and the lifting of a ban on exports from the U.S. could lead to a drop in world oil price, Lukoil believes.
Cheap gas resources from the U.S. and the Middle East could also increase pressure on world oil prices, as will agreements on Syria and Iran, the Russian oil company said in its quarterly report.
Lukoil said it uses a scenario approach to forecasting macroeconomic indicators that allows it to conduct a comprehensive analysis of the impact that macroeconomic risks might have on the group's operations. One scenario is deemed the baseline scenario, seen by management as the most probable development of the macroeconomic situation. The company also draws up optimistic and stress scenarios to assess the potential consequences that macroeconomic changes might have on its business.
The baseline scenario assumes zero or slight economic growth in developed countries in the short term, moderate growth of demand for energy resources in developing countries, a slight drop in prices in the short term and moderate growth of oil prices in future.
The stress scenario is based on a more conservative forecast for oil prices due to slower growth of demand as a result of a significant slowdown in global economic growth and more intensive development of unconventional reserves such as shale oil and gas, highly viscous oil and so on.