Unfading resources: how much are all of Russia's natural riches worth?
The aggregate value of Russia's natural resources is $100 trillion, Igor Sechin, Chairman of the XVII Verona Eurasian Economic Forum and CEO of Rosneft, said in his report from the rostrum of the XVII Verona Eurasian Economic Forum. According to him, this is almost twice as much as the similar indicator in the United States. How the price of Russian natural resources will change and how efficiently the Russian Federation uses them - in the material of "Izvestia".
Price change
The total value of Russia's natural resources changes over time. At the same time, these changes have positive dynamics.
Thus, in 2015, the total price of Russia's natural resources was estimated at $30 trillion. In 2017, this figure increased to $55 trillion, and in 2021 - to $75 trillion, which was confirmed by the German company Statista. And finally, in 2024, speaking about the total value of natural resources, the Russian authorities stopped at the figure of $100 trillion, said Hasan Ramazanov, an expert of the Russia-OECD Center of the Presidential Academy.
- The total value of Russian natural resources will vary depending on the discovery of new deposits, which are still unknown," Hasan Ramazanov explained to Izvestia. - It is also worth noting the relationship between the cost of natural resources and the population, which generates demand for certain resources. Population growth in the countries where Russian natural resources and derived goods are supplied, as well as the total cost of natural resources on the world market will affect the results of calculations of the total cost of natural resources in the future.
In addition, he said, subsequent technological development, especially toward renewable energy sources, will be important, since the main components of the value of natural resources are coal, oil and natural gas, which are used to generate energy.
Potential resources
Russia has vast undiscovered natural resources. Given the relatively modest spending on geological exploration and the low economic feasibility of developing hard-to-reach deposits, the use of natural resources cannot be called efficient, said Evgeny Mironyuk, stock market expert at BKS Investment World.
- The value of Russian natural resources should be assessed only taking into account the costs of their development. The nominal value of natural resources is relevant only in the context of a potential significant increase in their value or an increase in production efficiency (cost reduction)," the expert told Izvestia.
The value of Russia's natural resources depends on the dynamics of world energy prices, which, in turn, are determined by global demand, the transition to green energy and geopolitical factors, said Alexander Shneiderman, head of sales and customer support at Alfa-Forex.
- Demand for conventional hydrocarbons will remain strong in the coming years, which will support the current valuation. The transition to renewable energy sources may eventually put pressure on the cost of oil and gas, but natural gas, as a more environmentally friendly fuel, will be in demand during the energy transition," Alexander Shneiderman told Izvestia. - Also, rising prices for metals and rare earth elements used in the production of technologies will increase the importance of these resources.
Russia, in his opinion, is actively using its natural resources to strengthen its economy. Revenues from the export of oil, gas, coal and metals make up a significant part of the federal budget, providing funding for social and infrastructure programs.
Influence on the world
Russia accounts for about 20% of the world's natural resources. In particular, our country is the undisputed leader in the world in terms of reserves of, for example, gold and natural gas, iron ore, as well as a wide group of rare earth metals, said Evgeny Smirnov, Doctor of Economics, Professor, Head of the Department of World Economy and International Economic Relations of the State University of Management.
- This fact determines the high level of self-sufficiency of our country in almost all types of natural resources, the absence of the need to import them, as well as a high degree of export orientation of the economy for many natural resources," the expert told Izvestia.
It is obvious, in his opinion, that the estimated value of Russian natural resources is constantly changing, but mostly upward, since many types of natural resources are inexhaustible and their value and cost are increasing in the long-term historical retrospective.
- Therefore, if we take the reserves of, for example, mineral resources, they increase if the world prices for certain types of mineral resources increase, making it possible to extract these resources from previously unprofitable deposits. It should also be noted that Russia has actually exhausted easily accessible mineral deposits," he emphasized.
The World Bank estimates the total annual rent received by Russia for natural resources at 18.5% of GDP, but in relation to GDP this indicator is in a state of serious volatility (in 2020, for example, it was 7.6%, and in 2018 - 14.4%), and this can be explained, in particular, by the volatility of world prices for various resources, recalled Evgeny Smirnov.
- Russia, possessing planetary reserves of many natural resources, has historically depended on them, and they accounted for a significant part of GDP in our country. Thus, hydrocarbon mineral resources make a significant contribution to the country's income, but at the same time they also have an impact on the development of world commodity markets, - explained the expert. - Most of the above-mentioned rent falls on oil and gas. While in the 1990s resource rent did not exceed 10%, in the 2000s it already amounted to 20% of GDP. At the present stage, the efficiency of Russia's natural resource utilization depends to a large extent on geopolitical resources, given our country's complicated relations with some important players in the global economy.
For a resource-rich country such as Russia, it is important to assess how much a high degree of resource concentration contributes (or does not contribute) to the diversification of its economy or foreign trade.
- Here we should mention the well-known theory of the so-called resource curse, which states that highly resource-rich countries face a narrow economic base because they depend significantly on the revenues they receive from their natural resources. However, there are also examples in history of competent redistribution of income from their natural resources (for example, such Middle Eastern countries as Qatar and the UAE)," Evgeny Smirnov noted.
On the other hand, he said, Russia's historically growing dependence on the export of natural resources has led to the discovery of over 300 oil and gas fields in our country over the past three decades, which has led to a significant need for capital investment and has had a positive impact on the socio-economic development of a number of regions. Given the sanctions and the current dynamics of the Russian economy, which has proven to be more resilient than the economies of a number of Western countries, natural resources are more of a blessing than a curse.
The Russian economy still needs further diversification to overcome the risks of volatility in global commodity prices and, consequently, the volatility of export revenues, said Evgeny Smirnov.
- Undoubtedly, given our country's vast resources, its economy in the long term will largely depend on its natural wealth. However, it is also necessary to diversify the economy, which should be associated with the development of industries related to natural resources (e.g., transportation infrastructure, chemical and petrochemical industry, etc.), which will ensure sustainable growth and development of the economy in the future," concluded Evgeny Smirnov.
"Izvestia sent an inquiry to the Ministry of Natural Resources, but at the time of publication no response had been received.
