… in Russia, the oil price problems have become entangled with the ruble that has been falling from record low to record low. There are many losers when a currency gets smashed. __Russias Probable Default
… at least 1 percent of Russia’s annual oil production, or 5 million tons, is spilled every year. That is equivalent to one Deepwater Horizon-scale leak about every two months. Crumbling infrastructure and a harsh climate combine to spell disaster in the world’s largest oil producer, responsible for 13 percent of global output.
Oil, stubbornly seeping through rusty pipelines and old wells, contaminates soil, kills all plants that grow on it and destroys habitats for mammals and birds. Half a million tons every year get into rivers that flow into the Arctic Ocean, the government says, upsetting the delicate environmental balance in those waters. __Oil Spills in Russia
The actual figure is likely to be significantly larger, given the crumbling nature of Russian infrastructure, and the abysmal maintenance habits of Russian state-connected enterprises.
The Russian oil industry spills 30 million barrels on land each year — seven times the amount that escaped during the Deepwater Horizon disaster — often under a veil of secrecy and corruption. And every 18 months, more than four million barrels spews into the Arctic Ocean, where it becomes everyone’s problem. __Russkiye Perennial Oil Spill Disaster
It is Putin who has made Russia almost totally dependent upon oil & gas revenues — a filthy and counter-productive addiction, it turns out.
Many Russian oil firms are vertically integrated, owning both the oil fields and refineries that process crude oil. These firms can sell crude oil directly to their own refineries at low prices. Domestic natural gas prices are also subsidized, forcing Russian companies like Gazprom to use export revenue to fund investment in new infrastructure and projects. __EIA
Now, thanks to Putin, economic sanctions are driving down the rouble, driving out foreign investment, driving up inflation, and driving over a hundred $billion of capital flight out of Russia this year. “In conjunction with the sanctions, the drop in oil prices, if it continues, may well turn into a fiasco for Russia.” __Seeking Alpha
According to official, Putin-approved opinion polls, President Putin has never been more popular with the Russian people. That is likely to remain the case, as long as Putin maintains a stranglehold over virtually all Russian media.
On the Russian streets, things are a bit more complicated. Russians are deeply divided over Putin’s war against the Ukrainians. If life in Russia gets much worse, we are likely to see more Russians blaming Putin for their problems (although that is not likely to be reflected by state-approved opinion polling). More on Russia’s Unity Day march
Putin’s fantasy world is becoming a dangerous place
Time is not on Russia’s side.
The Oil Curse: Venezuela’s fate may be a preview for Russia. Oil states that refuse to diversify their economies — such as Russia or Venezuela — must suffer through the downturns. The USSR was unable to survive the last significant sustained downturn. Can Putin’s mafia-KGB government do any better?