Oil and Gas in the Capitals

Russia’s oil and gas sector is now on the verge of a major reshaping, something with ample, possible political consequences. Factors contributing to this situation are now converging, both from inside and outside the country. The European situation is affecting Russia’s hydrocarbon industry. Oil and gas exports are likely to stagnate or even decline in the next year and perhaps into 2014, as the European economy enters a long recession. This is, of course, the result of the Euro crisis. In 2010, we saw Greece, Ireland and Portugal hit by this crisis. In 2011, it was the turn of Spain and Italy. By 2012, even France has been forced into harsh austerity measures. As a result, economic growth went negative and will remain that way through 2012. It is even possible that this recession could degenerate into a full-fledged depression, as the cumulative effects of austerity in a large number of important economies add their weight.