Oil Prices Hedging as a Tool of International Energy Policy

Abstract

Among the main threats to the Russian energy sector is the high volatility of the oil markets, which leads to significant fluctuations in the volume of revenues received by Russian oil and gas companies and the country’s budget due to the export of hydrocarbon resources. It necessitates the search for mechanisms aimed at minimizing this risk. Such mechanisms should be of a political and economic nature. Russia can achieve a significant reduction in risks for the budgetary system through the introduction of a system of hedging oil prices. This system has found wide application in the practice of several oil and gas companies and is used at the national level in Mexico. The Mexican experience shows that the hedging system allows the country’s economy to overcome periods of falling oil prices on global markets without significant losses. Calculations show that for Russia, the economic effect of hedging could reach 4.36 trillion roubles over the period 2015–2020. The hedging system can also provide Russia with some advantages in the field of energy diplomacy.