Russia in strong position for price war

Oil producers in the country have relatively low upstream costs and greenfield projects ready to roll

Russian producers are ready for a war of attrition with Saudi Aramco, but some will handle the price collapse better than others. And having split with Opec+ in early March, Moscow is unlikely to change course anytime soon. Russia’s upstream costs average $4.70/bl oe, according to Moscow-based ratings agency ACRA. This is down from $5.60/bl oe last year, thanks primarily to depreciation of the rouble. At $25/bl, extraction and export taxes add a further $9/bl. But as tax breaks apply to many Russian fields, producers will continue to generate positive cash flow even if oil slides to $10/bl. Russia’s leading state firms Rosneft and Gazprom Neft are in a stronger position to weather the downtu