Petroleum Industry Russia

Question: Discuss about the Report on Petroleum Industry for Russia? Answer: Introduction: During the period of the twentieth century, the demand for petroleum was very high in the marketplace. Many countries around the world have started producing petroleum and traded the oil in the marketplace and generate high revenues for the nation. One of the key indicators of the financial activity of the nation was measured by trading petroleum and crude oil in the marketplace. Petroleum has become one of the vital sources of energy in the world. Thus, the demand for petroleum has increased in the marketplace. This is why; there is a strong relationship between the changes in petroleum price in the market and the GDP growth in a nation. As the demand for petroleum is increasing in the market, there is a rapid increase in the price of petroleum in the marketplace (Bybee, 2010). The rapid increase in the price of petroleum is treated as a good news for the countries exporting oil in the market whereas, the rapid increase in the price of petroleum is treated as a bad news for the coun tries importing oil in the marketplace. The main purpose of this research study is to scrutinize the growth of economic conditions of a nation and the impact on its GDP rate of the nation. The research analyst will analyze that how the economic growth of a nation gets affected on exporting the petroleum in the marketplace at its rapid movement of price. Background of the Nation Russia: Russia is popular for its petroleum industry in their nation. The nation is better known as largest reserves of petroleum in the world. Russia trades huge volume of petroleum in the global world. Hence, the nation is also known as the largest exporter of petroleum in the world. In a day, Russia produces around 10.2 million barrels of petroleum and exports the oil in the marketplace (Cashin, 2012). Russia is one of the oldest members of OPEC organizations. The nation is known as the eight largest petroleum reservoir in the global world, and hence the nation is popular for its largest manufacturer of petroleum in the marketplace. Trends in Petroleum Price and Economic Growth: In modern times, the petroleum has treated as the indicator or measurement of the financial stability of a nation. This is because the world's largest demanding natural resources are petroleum. It has been observed by the research analyst that petroleum is known as the largest trading products in the global world. Petroleum is known as the largest trading products in the world in both the volume of sales of crude oil and as well as the largest in price (DibooÂÅ ¸lu and Aleisa, 2004). Each and every nation is dependent on the natural resources of petroleum. If the price of petroleum increases, it affects badly on the consuming nations. Hence, many economist believes that the there is a strong relationship between the price of oil and the economic conditions of the country. It is also known as the financial indicator of the nation as it impacts on the GDP growth of the country (Brown and Obaid, 2000). Figure 1: Variation of economic conditions of the nation and the price of petroleum in the market Source: (Hertog, 2008) From the above figure, it can be observed that from the last twenty-five years, the economic conditions are totally based on the price of petroleum in the marketplace. This is because if the price of the petroleum increases then the economic conditions of the country becomes better as the country is exporting petroleum in the marketplace (Hertog, 2008). If the country imports petroleum from any other countries at a high price, then the economic conditions of the nation go down for importing petroleum at a high price. From the above graph, it can be stated that the economic conditions of each and every country depends on the price of petroleum in the marketplace. The Relation between Economic Growth and Petroleum Prices: The power of petroleum market can be observed on the impact on the financial condition of the nation and also on the GDP growth of the country. Apart from this, the financial growth of the country increases as the demand for the petroleum also increases in the marketplace (Mansell, 2012). This is because the price of the petroleum increases in the market that helps the country to trade the petroleum in the market at a very high price. The impact of financial growth on petroleum prices: In the last half of the year 2014, the financial growth of the country goes down as the demand for the petroleum also goes down on the market. This is because many countries are producing petroleum in their country and trades in the marketplace. This makes the supply of petroleum increases in the marketplace, and the demand for the petroleum goes down (Nakov and Nuo, 2013). As the demand goes down, and the supply of the petroleum goes high, the price of the petroleum in the marketplace goes down. The research analyst of this research study observed that the price of the petroleum goes down by USD 20 per barrel of petroleum. As the price of the petroleum goes down, the country producing the petroleum and trading in the marketplace at a very cheap cost which badly affects the financial conditions of the nation and also affects the GDP growth of the nation. The expertise analyzed that in the future year, the price of the petroleum goes down by USD 50 per barrel of petroleum (Ross, 2012) . If the price of the petroleum goes further down, the country will produce petroleum and will trade in the marketplace at a very cheap cost which will badly affects the financial conditions of the nation and also affects the GDP growth of the nation. It has been calculated by the expertise that the GDP rate of the nation will go down the baseline that will affect the financial condition of the nation very negatively. The impact of Petroleum Prices on Economic Growth: From the year 2014, the expertise observed that many countries are producing petroleum in their country and trading the product in the marketplace. Hence, the supply of petroleum increases in the marketplace and the demand of petroleum goes down in the marketplace. As the supply of the petroleum goes up, and the demand goes down for petroleum in the marketplace, the price of the petroleum goes down in the trading market for petroleum (Yates, 2012). In economic terms, this situation is known as the price elasticity. As the price of the petroleum goes down, it badly affects the economic conditions of the nation and also affects the GDP growth of the nation. Impact of Petroleum Price increase for exporter countries: The research analyst of the research study has been observed that the national income for the petroleum exporting countries is mainly dependent on trading petroleum in the marketplace. The nation was generating huge revenues for their Government to increase their financial conditions of the country and also tries to increase the GDP rate of the country by trading petroleum in the market at a very high price (Alshahrani and Gurrib, 2013). As the supply of petroleum increases in the marketplace and the demand of petroleum goes down in the marketplace, the supply of the petroleum goes up and the demand goes down for petroleum in the marketplace, the price of the petroleum goes down in the trading market for petroleum (YeÃÅ' pez-Garcia and Dana, 2012). If the price of the petroleum goes further down, the country will produce petroleum and will trade in the marketplace at a very cheap cost which will badly affects the financial conditions of the nation and also affects the GDP growth of the nation. It has been calculated by the expertise that the GDP rate of the nation will go down the baseline that will affect the financial condition of the nation very negatively. Conclusion: Russia is popular for its Petroleum Industry in their nation. The nation is better known as largest reserves of petroleum in the world. Russia trades huge volume of petroleum in the global world. One of the key indicators of the financial activity of the nation was measured by trading petroleum and crude oil in the marketplace. Petroleum has become one of the vital sources of energy in the world. Thus, the demand for petroleum has increased in the marketplace. This is why; there is a strong relationship between the changes in petroleum price in the market and the GDP growth in a nation (Alkhathlan, 2013). From the year 2008, the worth of petroleum was elevated in the marketplace and hence Russia has become wealthy financial conditions and the GDP rate of the country becomes wealthy. But in the recent years, the demand of petroleum goes down, and the supply goes high on the market. Thus, the price of petroleum goes down in the marketplace, and this causes a negative impact on the mone tary situation of Russia as the nation is recognized as the largest exporter of petroleum in the marketplace. Reference List: Alkhathlan, K. (2013). Contribution of oil in economic growth of Saudi Arabia. Applied Economics Letters, 20(4), pp.343-348. Alshahrani, S. and Gurrib, I. (2013). Pricing and Volatility Relationships for the Largest Oil Producer: Saudi Arabia. JOEBM, pp.57-61. Brown, L. and Obaid, N. (2000). 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