. Characteristics of the global oil market have changed from oligopolistic to a near competitive one, thanks to a large number of discoveries in recent times from different geographical locations.The US Geological Survey estimates the volumes of discovered hydrocarbons in Siberia are 144 billion barrels of oil and more than 1,300 trillion cubic feet ofgas.Annual average temperature in Siberia is around 5 C. Because of low temperature, lots of energy is required to keep the drilling machinerieswarm. Average cost of production of Siberian crude oil is 43.3 dollars per barrel. Price of crude oil in the international market is around 39 dollars per barrel. Global oil demand is price and income elastic. Oil producers in Siberia continue pumping the oil despite incurring losses. Why are they doing so instead of shutting down the production?