"JP Morgan" analysts state that the price of 1 barrel of "Brent" crude oil could fall to $30 by 2027. The reason cited is supply exceeding global demand. Currently, "Brent" has fallen by 14% since the beginning of the year, and on Monday, the price is around $62.59. Expectations of a potential resumption of peace talks on Ukraine are cited as a reason for the price drop.
Considering that oil revenues are one of the main pillars of the Azerbaijani economy, we can note that the forecast for the future is a cause for concern.
But is Azerbaijan economically ready for this situation?
**Mushfig Jafarov**, a member of the Milli Majlis Committee on Economic Policy, Industry, and Entrepreneurship, told **Modern.az** that oil prices will not fall for a long time yet:
"In April, "Brent" crude oil fell below $61 per barrel for the first time since 2021. For several days now, the price of "Brent" has started to decline. Last year, the Dutch international banking and financial services corporation ING (Internationale Nederlanden Groep) updated its forecast for the average price of benchmark “Brent” crude oil. The new forecast states that oil prices will decrease in global markets over the next two years.
The reason for the decline is the economic situation in China and the weakening of industry in the US. This situation of the world's two largest oil buyers has affected the market. I believe that even in the current situation, the drop in oil prices is cyclical. I do not think this process will be continuous. In my opinion, oil prices will not fall for a long time".
The deputy emphasized that the sharp decline in oil prices in the world market has no connection with the economy and can essentially be said to be based on political motives:
"If previously oil prices were determined on exchanges, oil has now become a political tool. Therefore, it is very difficult to make predictions in advance. However, as oil prices fall, Azerbaijan's revenues also decrease. The world is entering a stage where oil no longer dictates economies - on the contrary, oil producers are increasingly competing with tougher competition and diminishing profits. The cartel that once dominated the global market - "OPEC+" - is now losing control. The market is becoming increasingly fragmented and tougher.
It is known that the main share of our country's state revenues falls on the oil and gas sector. Although prices fell in 2020, the process did not last long - "OPEC+" had prevented prices from remaining low this time as well. Following this, prices rose due to the Russia-Ukraine war and several other factors".
