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 Low Oil Prices Will Destroy Russia as They Destroyed USSR - Die Welt

Russia’s main allies are the army, navy and winter. So said Russian Tsar Nicholas, who was called the "gendarme of Europe" a few centuries ago. Now in a dispute with the West over the war in Ukraine Russia once again relies on the army and winter, during which the demand for energy will increase.

Using gas issue before winter Russia is trying to put pressure on the newly elected power in Kyiv and Europe, which supports the Ukrainians. However, the rapid fall in oil prices on the international market greatly reduced the price of energy resources and deprived the Kremlin of its main source of fiscal revenue, Die Welt writes, according to Censor.NET.

The author draws parallels between the current situation in Russia and the USSR in the late '80s. The Soviet Union became a seller of oil in the '70s. Owing to the profits from the sale of energy resources, the Kremlin could provide a high standard of living for the political elite and a decent one for ordinary citizens. It could also finance Communist parties in the West and "arrange nuclear tours, ferrying missiles to Cuba or Angola."

Read also: Oil Prices Continue Dropping Due to U.S. Stockpiles Increase

The article notes that the oil crises have always been for the benefit of the USSR, which made good money on them selling the "black gold". But when the Iran-Iraq war began in the '80s, Moscow could not capitalize on the conflict, and the Soviet Union collapsed.

The newspaper reminds that the Saudi Arabia flooded the market with cheap oil to stop the conflict. The cost of a barrel fell by $ 6 each day and did not go back up. This had significantly hurt the USSR budget and became one of the causes of its collapse.

"Today, Russia's budget and its social programs are based on the price of 95 dollars per barrel. But the shale revolution in the U.S. collapsed the market price. It currently constitutes 84 dollars per barrel, which is already critical for Russia," the article says.


 
 
 
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