Tuesday, 23 September 2014

The price of oil

This year has noticed a marked drop in the price of oil, in the last three months the price of crude has dropped from 114 to 97, this is mostly due to more production from countries like Iraq adding to global stock piles.

My reason for remarking on it now is I am curious how this is affecting Vladimir Putin and Russia?

Russia relies on oil and gas for around two-thirds of exports and half of federal budget revenues. Over the course of a year, each $1 fall in the oil price wipes around $1.4 billion off federal tax revenues apparently. The oil sector, along with finance and defence, is also among the targets of western sanctions against Russia over its annexation of Crimea and what the United States and European Union say is its backing for separatist rebels in east Ukraine.

The question is did Putin move into the Crimea and Ukraine because of what he foresaw might happen to oil prices or is the drop only just starting to hit now?

What does a rat do when it is cornered, usually attack...

Does this mean that Russia is currently planning more expansion in the world, probably, so where would they strike next?

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