The drop in oil prices in 2014 had a significant impact on the economies of many countries. And if you believe the forecasts of the world’s leading analysts, a rapid change in the situation in this area for the better is not worth waiting for. Moreover, the cost of a barrel of crude oil is expected to continue to decline to $40. Under these conditions, a return to the previous level of prices in the oil market looks increasingly illusory.Graph of Brent oil >>What is the danger of a further decline in oil prices for the Russian economy? At the very least, it threatens us with a budget deficit – in an unfavorable scenario, it may amount to 2.5 trillion rubles. Find out more about it in the analytical materials of experts at brokers.ru.Oil price drop: causes and consequencesThe decline in black gold prices began in the third quarter of 2014. It was then that the futures contracts for Brent – the most popular oil brand in the world market – began to fall rapidly in price. To estimate the dynamics of this fall, it is enough to say that from the starting $ 115 per barrel price to January 2015 has halved – to $ 60. Moreover, there has been a repeated trend towards a further fall in price. But each time the chart curve returned to the previous, relatively safe price level.However, it’s not the first time the oil market has experienced shocks. Thus, by the end of 1998, marked by one of the largest financial collapses in the history of modern Russia and the world, oil prices have demonstrated an equally rapid decline, falling outside the “comfort zone” of $ 10 (with prices at the beginning of the year at $ 17 – $ 18 per barrel). However, the unexpected market crash six months later was replaced by the expected growth. And, in 1999, oil was already worth more than $15 a barrel.Another landmark year for the world economy, 2008, also brought significant price fluctuations in the oil market. For example, the price of a barrel of oil fell from $147 per barrel to $33 per barrel in the six-month period from July to December. Again, it took about six months to correct to a relatively safe price level of $60.What caused the oil crisis in 2014? In fact, everything is quite simple: the volume of hydrocarbon production exceeded the demand for this type of raw material. And the resulting surplus could not but affect the price level in the market. What is the mismatch between the resources produced and the demand for their acquisition? First of all, with lower demand for fuel in China and European countries. However, additional risk factors pulling the oil market to the bottom were the increase of oil production by Iraq and the expected refusal of the sanctions policy against Iran.Oil production and prices: forecasts and expectationsOPEC, a powerful regulator of the oil market, this time refused to artificially stop the price decline by reducing production. The production quota for the cartel members, which produces 40% of all oil entering the market, remained unchanged at 30,000,000 barrels per day. And the market was given the opportunity to go “free floating”, expecting that sooner or later the prices will be adjusted.Why are the Gulf countries, for which oil is the main source of income, so fiercely defending the existing quotas, which form the basis of OPEC? According to one of the versions, the sharp decline in prices is aimed at the destruction of the shale oil market, for which a drop in the cost of a barrel to the limit of $ 40 – $ 50 is almost equivalent to the destruction of the industry. To learn more about the situation in the U.S. oil market you can from the material “USA: the number of drilling rigs in operation is constantly falling” on our website.However, there is an opinion that the fall of the oil market is primarily directed against Russia, which already suffers significant losses under the pressure of economic sanctions.Saudi Arabia is especially persistent in defending its position, which has already had a sad experience of reducing oil production quotas in the eighties of the last century. Then the released market share was quickly occupied by other large players, not bound to OPEC. And in order to avoid a repetition of this scenario, Saudi Arabia today will stand on the preservation of production volumes to the end. However, this country still builds its budget for 2015 based on the calculation of oil price preservation around $80 per barrel.What about the Russian budget? One can hardly expect optimistic developments here. After all, the oil price level is budgeted at $96 per barrel. Accordingly, even keeping the price level at $60 per barrel will result in a 5% budget deficit. Not to mention the fact that it will become even higher if the prices fall to $ 40 per barrel.What is the state going to do to cover this deficit? By reducing budget expenditures – by at least 5% per year. The Ministry of Finance has already received the relevant order from the President.What can we expect from the oil market in 2015? Definitely high volatility. Prices will be either rising or falling below expectations. A real increase in the cost of a barrel of oil can not be expected before the end of the year.