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 Falling oil prices hit Russia much harder than Western sanctions - Washington Post

Plummeting oil prices are doing to the Kremlin what sanctions could not: forcing a grim rethinking of Russia’s economic future.

This is reported by The Washington Post, Censor.NET informs.

Thus, the medium notes, nine months into the worst relations between the West and Russia since the Cold War, the plunging price of oil is causing deeper and swifter pain than the Western sanctions that have targeted key areas of Russia's economy.

Read also: Kerry Says Sanctions Have Not Stopped Russia But Damaged Its Economy

Russian leaders said Tuesday for the first time that their economy will head into recession next year. In a nation where oil and gas exports largely determine the bottom line, lawmakers are slashing spending promises. And the ruble is hitting historic lows every day, the newspaper noted.

Also, President Vladimir Putin, who took office in the wake of his nation's 1998 financial crisis, has made economic stability a cornerstone of his nearly 15 years as leader. He has vowed that Russia will survive the current decline in energy prices - but he has also accused the West of waging pocketbook warfare over the cost of a barrel of oil. Putin's approval ratings remain near record highs, but opinion polls also show new economic fears, a warning sign for the future.

The turmoil comes as Western sanctions against Russia appear likely to remain in place for years. The United States and Europe imposed them after the Kremlin annexed Ukraine's Crimean Peninsula in March and ramped them up in July after a civilian jetliner was shot down over territory held by pro-Russian rebels in eastern Ukraine.

But the sanctions have done little to alter the core policies they were intended to target: Moscow shows no intention of giving up Crimea, and Western leaders say Russia actually upped its involvement in the conflict in eastern Ukraine after July's round of sanctions.

Oil prices appear to be changing policy calculations far more quickly, in part because Russian leaders believe they are significantly more threatening, given oil's role as the lifeblood of the Russian economy. Finance Minister Anton Siluanov last week pegged the cost of lost oil revenue at $90 billion to $100 billion a year and the cost of sanctions at $40 billion, the medium noted.

Источник: https://en.censor.net.ua/n314616
 
 
 
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