The falling oil consumption and the collapse of oil prices have significantly reduced the flow of petrodollars to Russia’s budget
Oleksiy Volovych,
Ph.D. in History
Part 2
Significant transformations may soon take place in the OPEC’s activities: either this organization will be strengthened by its enlargement and a greater level of mutual understanding, or it will cease to exist altogether. The decline in oil prices will affect, first of all, the countries “sitting on the oil needle” — Russia, Saudi Arabia, Iran.
The falling oil consumption due to the coronavirus pandemic and the collapse of oil prices on the world market have significantly reduced the flow of petrodollars to Russia’s budget. Despite plans to diversify the Russian economy, its dependence on the raw materials sector continues to grow. With the world oil and gas market undergoing a strong redistribution and displacement of weak players, it will be difficult for Russia to maintain its market share. After all, its raw products are less competitive than Saudi, European or American ones. Therefore, Russia may experience a full-scale economic collapse, the main political consequence of which will be destruction of small businesses, rising unemployment, lower living standards of the majority of the Russian population, which may increase socio-economic and political instability already in July–August–September 2020.
Some experts believe that the weakening of Russia’s economy due to falling revenues from oil and gas sales may weaken Putin’s aggressive actions against Ukraine. But I believe that V. Putin can decide on a full-scale aggression against Ukraine and thus to try to rescue Russia’s economy from the crisis, while diverting the population’s attention from economic problems, immersing it once again in chauvinistic hysteria…
The article is available in Ukrainian
