By Emre G├╝rkan Abay
Russia letter, week beginning Jan. 16

- Russia begins oil production decrease 

Russia as one of world’s largest oil producers announced last week that it has started reducing its oil production in line with the OPEC agreement.

According to the agreement, Russia is to decrease its oil production by 300,000 barrels per day, until the end of the first half of 2017.

While no details were given as to the decreased production amount, it was reported that Russian oil companies “voluntarily” cut their production.

Kremlin Spokesman Dimitry Peskov stated that Russia was fulfilling its part of the OPEC agreement.

We can expect Russia to continue its positive statements regarding oil markets to push oil prices higher which is crucial for the country’s balancing of its budget.

Meanwhile, according to Russian Federal Customs Services (FTS), Russia’s oil revenues in the January-November period last year, dropped by 20 percent to $66.3 billion, compared to the same period of 2015.


- Nearly half of all Russians struggle to make ends meet

The Russian economy has been struggling over the last two years, and among the biggest problems in the country is the drop in the purchasing power of its citizens.

One of Russia’s most distinguished institutions, the Moscow-based Higher School of Economics, has conducted research that highlighted this problem.

According to the research “Russian People in 2016,” nearly half of the Russian population (41 percent) is struggling to purchase basic food and clothing needs.

The real income of Russian citizens has dropped by 12.7 percent since October 2014. However, the research also showed that only 17 percent of Russians consider their financial status as “very bad.” Experts explain this issue by asserting that “bad living conditions” are normal for Russian people. 

16 Jan,2017