Constrained by the OPEC+ production cuts and the necessity to balance its 2020 federal budget, Russia has started to play with one of the most dangerous policy instruments it has at hand – upstream taxation. For decades, Russian oil companies have been complaining that the constant tinkering with upstream terms is complicating their long-term strategic deliberations and unnerving potential foreign investors. This September, without the usual state media fanfare, the Russian parliament has approved the first reading of a Finance Ministry-masterminded bill that would seek to abolish tax breaks that Moscow deems superfluous, along with paving the way for the oft-promoted profit-based taxation system. The underlying rationale for this rather bold move (on the back of many years’ foot-dragging) lies in the Kremlin’s fear that the coronavirus-triggered economic slump will have a larger than expected impact on the nation, hence the need to create additional sources of income for […]