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Oil prices not to increase in next two years - Matthew Bryza

Oil prices not to increase in next two years - Matthew Bryza

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Date: 22 December 2015 18:32

Baku, Azerbaijan, Dec. 22

By Anahanum Khidayatova – Trend:

Price of oil is probably not going to increase very much in the next year or two, Matthew Bryza, former US assistant secretary for South Caucasus and former US ambassador to Azerbaijan, told Trend Dec.22.

The Central Bank of Azerbaijan switched to the floating rate of the national currency (manat) from Dec.21, 2015.

As a result, the exchange rate of the US dollar and euro to manat rose by 47.6 percent and 47.9 percent and stood at 1.55 manats and 1.685 manats, respectively.

Bryza said that if the oil prices remain at a low level, the foreign exchange earnings of Azerbaijan will be reduced, therefore, the dollar will rise.

He went on to add that in 2016, Iran will offer twice more amount of oil than Azerbaijan exports.

After Iran starts selling oil, its volumes in international market will increase, and even longer time will be necessary for the prices to increase, according to him. A million barrels of oil per day more is produced than is consumed, three is too much oil produced in the world, he said.

The expert said that the rise in oil prices is possible provided the recovery of the EU economy, further development of the economies of the United States, India and China, which will lead to increased demand for raw materials.

The positive side of this situation is the fact that the country's economy will have to reform to be efficient, he said.

Now it is necessary to be careful in spending and make more accurate investment decisions, said the expert.

The Southern Gas Corridor project will help Azerbaijan, increase its earnings, but the forces that have broke down the price of oil and the value of the manat are stronger than the forces that will pull the manat back up, he said.

The Southern Gas Corridor project is really important for Azerbaijan for its security, because now Azerbaijan will be even more connected to transatlantic community, to Europe but also to NATO, Bryza said.

The Southern Gas Corridor project envisages the transportation of gas from the Caspian region through Georgia and Turkey to Europe. This large project aims at diversifying the routes and sources of energy supply that will enhance energy security of Europe. The Southern Gas Corridor project will ensure Caspian gas supply to the European markets for the first time in history.

At the initial stage, the gas to be produced as part of the second phase of development of Azerbaijani gas condensate Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. At a later stage, other sources may join the project.

The gas to be produced as part of the Stage 2 of the field's development will be exported to Turkey and to the European markets by means of expanding the South Caucasus Pipeline and construction of the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP).

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