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Expert talks on rise of oil prices affecting Turkey's economy

Oil&Gas Materials 22 November 2017 15:12 (UTC +04:00)

Baku, Azerbaijan, Nov. 22

By Ali Mustafayev – Trend:

Relative stabilization of oil prices in the global market as a result of reduction of its production level within the framework of the OPEC agreement is beneficial for oil producing countries, Oleg Egorov, an energy expert and chief researcher at the Institute of Economics of Kazakhstan, told Trend.

However, it remains questionable whether one may say the same about oil importing countries, such as Turkey, for example, he said.

“Previously, oil prices rose to $110 per barrel, and compared with this, the current prices have no great influence on the economy of Turkey and similar oil importing countries, in addition, Turkey gets revenues from the Baku-Tbilisi-Ceyhan oil pipeline passing through its territory, and this also, in turn, compensates for the increase in oil prices,” he added.

The expert said that oil prices are unlikely to rise to the previous indicators ($100-$110 per barrel).

“If there is something the world community understood after the sharp collapse of oil prices, it is that too high oil prices negatively affect a country’s economy,” Egorov said.

The expert noted that in this case, economy becomes dependent on extraction of raw materials, and this, in turn, is an obstacle for other industries of an oil producing country.

OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.

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