Posted on 06/29/2012 5:27:21 PM PDT by bruinbirdman
Despite President Putin’s show of confidence at St. Petersburg’s annual economic forum, former Finance Minister Alexei Kudrin has warned that Russia could be facing a dramatic economic downturn in the near future. According to the New York Times, Kudrin suggested that “the situation is a lot worse than it was presented” at the forum, especially if oil prices continue to slide further below the $117/barrel mark the Kremlin needs to balance this year’s budget. If Putin’s campaign promises of higher wages, improved maternity leave benefits, and increased military spending kick in, the national budget could become even more precarious, Kudrin added, suggesting that “We need to look again at all programs being launched or expanded. Even our current expenditures will be difficult to meet.” The former finance minister predicted that oil prices could drop below $60 per barrel.
Saudi leaders, staunch supporters of fellow Sunni Syrian rebels, have criticized Russia’s dogged support for the repressive Assad regime, and as oil prices continue to drop, Russia is beginning to feel the bite of their disapproval. Reuters reports that as oil falls below $90 a barrel, Saudi Arabia shows no indication of slowing oil production. While Riyadh’s revenue surplus can weather the slump, Iran and Russia - both Assad supporters - could soon face budget shortfalls. “Russia’s economy is vulnerable to a sharp drop in oil prices,” notes U.S. oil analyst Phil Verleger. “The Saudis may be able to exploit that vulnerability by keeping production at 10 million barrels per day.” Analysts estimate that if OPEC oil output remains at 31.5 bpd, oil prices will fall to $74/barrel by the end of this year, and as low as $59 a barrel in the first quarter of 2013.
The steep decline of oil prices from 1980-86 accelerated the collapse of the Soviet Union. The Soviets lost a ton of hard cash and were forced to borrow from western banks. Then Soviet oil production started to decline in 1988 and things got really bad.
Exactly. And now they're counting on $100+ oil?
Well, The Obammunist is counting on Socialized Medicine, too.
yitbos
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