Russia could collapse before US shale producers goo.gl/ZB1L2f The Wall Street Journal talked about how Russia’s Debt and Currency Markets Could Spiral into Crisis in October. This was before OPEC decided to keep oil production and drove down the price of oil. Some now speculate that oil prices could drop to $30 to $40 per barrel before later stabilizing around $70 per barrel. Moscow gets more than half its budget revenue from oil and gas; for every $10 drop in the per-barrel price of oil, Russia loses up to $14.6 billion a year in revenues, according to Alfa Bank. Another $40 per barrel drop would cost Russia almost $60 billion per year. Russia had $524 billion in reserves just 11 months earlier. $69 billion depletion happened in ten months. In just five months during the global financial crisis of 2008-2009, Russia suffered $210 billion in reserve outflows. Indeed, the country has an almost unbroken history of capital flight – its wealthier citizens have always spirited their money offshore – and there’s plenty about the current environment that could cause that trend to pick up.
Posted on: Tue, 02 Dec 2014 04:37:55 +0000
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