RE: Russia's imploding.
January 28, 2015 at 8:47 pm
(This post was last modified: January 28, 2015 at 8:59 pm by Anomalocaris.)
From the rebound in oil prices.
The low oil price is the primary driver of russian recession. Low oil price is unsustainable because there is no fundamental reduction in oil demand, or increase in oil supply. It is only being maintained in the short term by Saudi arabia maintaining high rate of production. Saudi Arabia can't keep this up, because just like with russian governement, the fiscal integrity of Saudi governement depends on tax revenue supported by high oil prices. Saudi Arabia is willing to bleed for A while to achieve some political goals. But it's can't keep it up forever.
So the growth comes from the fact that the current low oil price which is strangling russian governement income has to rebound within 2 years at most, most analysts suggests well within 1 year.
The low oil price is the primary driver of russian recession. Low oil price is unsustainable because there is no fundamental reduction in oil demand, or increase in oil supply. It is only being maintained in the short term by Saudi arabia maintaining high rate of production. Saudi Arabia can't keep this up, because just like with russian governement, the fiscal integrity of Saudi governement depends on tax revenue supported by high oil prices. Saudi Arabia is willing to bleed for A while to achieve some political goals. But it's can't keep it up forever.
So the growth comes from the fact that the current low oil price which is strangling russian governement income has to rebound within 2 years at most, most analysts suggests well within 1 year.
