The Russian Economy and the Geopolitics of Oil and Natural Gas
Tsar Vladimir in the Kremlin INTRODUCTION: THE RUSSIAN ECONOMY Russia is a petrostate. The Russian economy looks more like an OPEC economy than a European one. Oil and natural gas accounted for two-thirds of exports and over half of government revenues before the fall in prices. Most of Russia’s other exports are raw materials and metals, including nickel, gold, diamonds, uranium, palladium and aluminum. The price of crude oil has fallen, from a steady range of $100-$115 a barrel over the last five years (2010-2014) to the current range of around $50-$60 a barrel. Global demand is stagnant and new sources of oil are coming from fracking, tight sands wells and deep sea drilling. So far, oil production in the United States and Saudi Arabia has actually increased since the collapse in oil prices, although decreased production in the United States will probably begin in a few months if U.S. prices stay below $70/barrel. I...