The Finance Ministry wants to insure against the fall in oil prices

The Finance Ministry wants to insure against the fall in oil prices

MOSCOW, January 22. The Finance Ministry wants to use Mexico’s experience with the hedging of oil prices through the conclusion of forward transactions. This was reported to journalists the Deputy Minister of Finance Maxim Oreshkin.

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He also added that it has no relation to the plans for the Russian benchmark in the oil market.

“Our main focus of hedging is that oil prices, now they are low, and this question is rather theoretical, preparatory. The goal for 2016 is to create a technical infrastructure that such transactions could in principle be done,” said Oreshkin.

He noted that Mexico, which in August last year, has hedged all of its oil and gas revenues under $49 per barrel this year.

“They enter into forward contracts, in the case of lower oil prices they are paid”, – explained the official.

However, he notes that all oil revenues to hedge is impossible. The question concerns only a part of them. “About which part, I now I will not say anything, because technically there is no such possibility,” said Oreshkin.

Brent crude has plunged 27% and is now trading at $28/bbl. Based on the forecast annual average oil prices are calculated the main parameters of the budget.