In the run-up to his visit to the Arab Republic of Egypt, Vladimir Putin gave an interview to the Al-Ahram daily newspaper.
QUESTION: To what extent has the drop in global oil prices influenced the state of Russian economy? In your opinion, what effect will this phenomenon have on the Middle East countries, global economy as a whole?

VLADIMIR PUTIN: Russia is an active participant in the global economic relations. And, of course, Russian economy is affected by sharp fluctuations in the global economic situation, especially such as a 50% plunge in oil prices. For Russia, as one of the world's largest oil-producing countries, it means certain problems related to budget revenues, state spending on economic growth and implementation of oil companies' investment programs.

At the same time, I would like to underline that it is not the first time we have faced such problems. We have the experience of overcoming the previous crisis of 2008–2009. Just like then, Russia has accumulated substantial reserves which enable us to cope with the effects produced by negative factors.

The Government has adopted a large-scale plan of actions to ensure sustainable economic development and social stability. It includes support for the real sector of economy and systemically important credit institutions, employment promotion and assistance to small and medium-sized businesses. We will optimize budget expenditures and monetary policy.

As for the Middle East region, where oil-producing countries have traditionally been playing a significant role, current oil prices are also having an evidently negative effect. Budgets of many countries were drafted on the basis of oil prices that were higher than the current ones. What is more, the region is facing new challenges and an adequate response to them will require additional resources. This is why in the Middle East there is a growing understanding that the oil market should be stabilized and demand balanced with supply.

After all, what is the major risk posed by dropping oil prices? It is that the oil and gas industry becomes less attractive for investors. They have to abandon developing technologically complex oilfields and infrastructure development projects, and, as a result, oil supply on the market will gradually but inevitably shrink. It means that at some moment there may be a powerful price correction in the opposite direction that will mean a real economic shock. Such disturbances do not benefit anyone – neither oil producers, nor consuming countries or the global economy as a whole.

I would like to stress it once again: a predictable and stable energy market serves the interests of all countries. This is why in the current situation it is necessary to combine the efforts of responsible actors of the global oil market to create conditions for its steady long-term development.