Russian firms and government to suffer under oil cuts

Significance

The cuts will be shared out rather than being borne only by the large producers, and companies face difficult choices about new investments and existing fields.

Impacts

• Comparatively low transport costs via pipelines reaching export markets in Europe and China still give Russian producers a competitive edge.
• The decline in oil-sector investment will contribute to a domestic recession.
• Shrinking domestic demand will further depress budget revenues.