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Page added on November 24, 2014
Russia losing $140 billion from sanctions and low oil prices
Russian President Vladimir Putin received a high-ranking black belt in karate Friday, but his master fighting skills haven’t been enough to fend off economic troubles.
The country is losing up to $140 billion per year because of falling oil prices and sanctions with Western nations, according to estimates from Russia’s finance minister Anton Siluanov.
This is the clearest sign yet of just how much trouble Russia is in.
Siluanov said in a speech on Monday that falling oil prices were causing the most damage — leading to $90 billion to $100 billion in annual losses. Russia, which is a major oil exporter, has suffered immensely as oil prices have fallen by roughly 30% since hitting a recent peak in June.
Related: These countries are getting killed by cheap oil
Meanwhile, Western sanctions are expected to lead to another $40 billion in annual losses, said Siluanov.
The U.S., Europe and other major nations came together this year to slap trade sanctions on Russia for its role in the Ukrainian crisis. Russia responded by banning various food imports from these nations, which has hurt many European food exporters and crimped global business sentiment.
Siluanov had previously spoken out about his government’s struggles with lower revenues and talked about cutting spending by 10%.
In October, he said Russia is living in an “alternative economic reality” by budgeting as if oil is still trading at $100 a barrel. (In fact, oil has been trading at or below $80 for much of the autumn.)
Related: 5 reasons Russia may face worse times
Silonauv also noted Monday that everyday Russians are converting their savings from rubles into other foreign currencies as the value of Russia’s money has plummeted.
The Russian ruble has fallen by about 27% versus the U.S. dollar since the start of the year.
21 Comments on "Russia losing $140 billion from sanctions and low oil prices"
trickydick on Mon, 24th Nov 2014 7:55 pm
Is the Russian economy that small, that $180 billion is a worrisome amount?
Makati1 on Mon, 24th Nov 2014 8:07 pm
CNN is spouting more propaganda about “bad Russia”. So what? It is hurting Europe even more and Europe cannot take the hurt for long before they are in a depression. Whereas, Russia can take it for as long as necessary and plans to.
You all need to read some real news outside the MSM Iron Curtain of the Empire.
I would ask this question: If it was hurting Russia so much, why are the Russians buying up so much gold? And why would Putin worry when they have enough reserves to last at least 4-5 years. By that time it will all be over one way or the other. Europe dead or WW3. The sanctions are actually helping Putin to consolidate and become independent of the West. The West claims Russia is isolated. True. They are isolated from the dying West but there are ~170 other countries to work and trade with. And, they are.
I find that the FACT that the US cannot even replace or launch military or commercial satellites, without Russian engines, is hilarious! Two US attempts to resupply the space station failed recently. Thanks to Russia, the space station can still be serviced reliably. DC is a madhouse of panicking psychopaths only able to create chaos with everything they touch.
Makati1 on Mon, 24th Nov 2014 8:31 pm
Is this site being censored by someone? I tried to send a comment with a Russian website article referenced and it wasn’t accepted 3 times…
Makati1 on Mon, 24th Nov 2014 8:34 pm
Guess it is not allowed. Too bad. It proved that the above article is propaganda BS. The Russian 2014 budget is about $440B. The actual deficit, as of November 1, is about $12.5B or a small percentage, not the drastic numbers stated in the article above.
Davy on Mon, 24th Nov 2014 10:11 pm
Calm down Mak, you are demonstrating clear propaganda dissonance. This is when your ideology or group is under threat and you respond by repeated and emotive postings. They are doing what you do and that is spew distortions of the opponent. How does it feel to be on the receiving end?
Makati1 on Tue, 25th Nov 2014 1:54 am
Davy, go tend your livestock. I was just asking why a certain post was repeatedly denied. So I will try again. ^_^
Makati1 on Tue, 25th Nov 2014 2:01 am
Google: “Russian-Government-Approves-2014-2016-Budget”
Since the website here will not let me post the address. I guess reality is not wanted. After all, the name of the game in DC is destroy Putin and plunder Russia’s resources for the corporate elite. What they are going to get is a nuke on DC among other USSA locations.
Davy on Tue, 25th Nov 2014 5:58 am
Geeze Mak, no wonder you are a Sci-Fi fool. Your above comment is distorted and delusional. While some of these issues are true the world is not that simple. Russia is part of this game of mischief. You continue with your propaganda dissonance. You live in a fictional world of good Asia and bad west. What could be more distorted than that? You remind me of the belief and faith that cultist have that revolve around good and evil and no in between.
JuanP on Tue, 25th Nov 2014 9:28 am
Mak, Good point about Russia’s Gold purchases. I am very impressed with how Russia has cornered the physical Gold market. In the last few months, Russia has purchased more physical Gold than all the rest of the world combined.
My understanding is that this was Glaziev’s idea and Putin signed in.
Russia is systematically selling all US Dollar denominated assets and exchanging them for physical Gold because they believe that the US Dollar is overvalued and Gold is undervalued. Sounds like a smart investment to me. Of course, there is very little physical Gold compared to Us Dollars so only the first to do this will get the best return and be able to do it.
China has stopped increasing its US Dollar denominated assets, too. There could be an agreement between them on this issue, I think.
Kenz300 on Tue, 25th Nov 2014 9:36 am
Russia is not a reliable trading partner……
Europe needs to diversify its energy sources and types and rely less on Russia for energy supplies.
Russia is a one horse economy that also needs to diversify.
———————–
Solar and Wind Energy Start to Win on Price vs. Conventional Fuels
http://www.nytimes.com/2014/11/24/business/energy-environment/solar-and-wind-energy-start-to-win-on-price-vs-conventional-fuels.html?emc=edit_th_20141124&nl=todaysheadlines&nlid=21372621&_r=0
JuanP on Tue, 25th Nov 2014 9:51 am
I read the speeches referred to in this article and my interpretation was quite different. This is another Western MSM BS anti Russian propaganda piece.
The truth is Russia will lose at least $100 billion because of lower oil prices and $40 billion because of the sanctions. This is for 2014, this is not a per year number. Nobody knows what will happen in the world next year, all bets are off.
Mak makes many good points in his first comment.
Russia has not been isolated. Last week’s vote at the UN is proof of that. The Russian resolution had 115 votes in favour, 55 cowardly abstentions (mostly Europe), and THREE votes against it: the USA, Canada, and Ukraine. It is very clear that the international community stands with Russia on this conflict against the Nazis.
This uncalled for aggression has been an opportunity for Putin and Russia to begin preparing for what is coming. Putin did not waste it. Russia is stronger and more united now than it has ever been and will withstand anything we throw at it.
The Western world, Western culture, Western MSM, and Western values are the big losers here. Particularly the USA, Canada, and the former European empires. The world no longer believes in them, we’ve been lied to too much, and we can see through the lies now.
The truth is the Western World is falling apart from the inside out.
Feemer on Tue, 25th Nov 2014 10:30 am
and capital flight is projected to be over $100 billion this year, and was over 50 billion last year
Davy on Tue, 25th Nov 2014 10:31 am
Juan, yea, agreed Mak makes some much needed points to paint a true picture of the Russian financial situation. It is a mixed bag and it is fair to say Russia may win it may lose. Too bad for Mak’s intent which is precisely the intent of the people he is trying to counter. It is that intent that is part of his broad ranging propaganda effort that discredits his message in my eyes. You and Greg are both US critical but you are critical in what I consider a constructive and fair way. Mak and other Mak types are disrespectful of those of us on this board that are Americans. I have no issue with China nor Russia. There is much to admire about those two countries. What I disagree with is their glorification along with the diminishment of the west. So if I give China and Russian criticism it is to effect balance in this general anti American conversation.
I disagree with the glorification of Putin. Putin is the top politician in the world for skills and innate leadership but that does not make him any better in intent. He is a blue eyed devil and smart blue eyed devils are the most troubling and dangerous. The US leadership is inept and lacks critical skills. The US leadership tries to make up for this impotence with ineffectual blunt force. I whole heartedly welcome the criticism of this impotent blunt force and other US issues. These issues are the primary theme of this site and many other in the socio-political blogosphere. This is the price of being a superpower, actually a “has-been superpower”.
I get so tired of the glorification of the rest of the global world. It is the usual bash America and claim the rest of the world is innocent. It is shows a lack of sophistication and IQ. So I said my peace. Live by the sword die by the sword so those of you that disagree please take a swing I am ready for battle.
Feemer on Tue, 25th Nov 2014 10:36 am
Ok, Ukraine is not being taken over by Nazis, despite all you hear from Russian propaganda.
Davy on Tue, 25th Nov 2014 10:53 am
Look Nazi types are everywhere. They are here in the US. I would agree there are some in the Ukrainian leadership but this claim they are running the Ukraine is pushing it.
JuanP on Tue, 25th Nov 2014 12:49 pm
Nazis are not ruling Kiev, but they are running around undisturbed committing multiple atrocities in that corner of the world. I suspect it was Kolomoyskyi and his Nazis that might have shot down flight MH17. It seems to me the most plausible explanation.
Most of Ukrainians want the same thing we want, to live their lifes in peace. These things are never about what the people want. It is all about money, power, and resources for the billionaires.
JuanP on Tue, 25th Nov 2014 12:55 pm
I don’t think the Kiev government is strong enough to stand up to the Nazis at this point, and they know it. It might end up being this Banderistas that remove Poroshenko, I wouldn’t be surprised at all if at some point all these newly created “National Guard” Nazi punitive battalions led by Kolomoyskyi turned on Poroshenko and got rid of him. The only certain thing in Ukraine is that Ukraine is doomed to collapse.
GregT on Tue, 25th Nov 2014 1:27 pm
“Most of Ukrainians want the same thing we want, to live their lifes in peace. These things are never about what the people want. It is all about money, power, and resources for the billionaires.”
And ^this^ is the reason that the world is in so much turmoil.
Davy,
The Nazis may not be ‘running’ Kiev per se, but their ideologies are running rampant throughout Western Ukraine. The Russians are standing in solidarity with the ethnic Russians in Eastern Ukraine, as they should, and we in the West, should be as well. There is no place in the 21st century for Neo-Naziism, ethnic cleansing, or genocide. We all should have learned hard lessons from WW2. Your government, and mine, are are the wrong side of this conflict. Even worse, it was the West that fomented the situation in Ukraine to begin with, for the benefit of a few, at the expense of many.
https://www.youtube.com/watch?v=-LKFptM7oOk
Tom Ballentine on Tue, 25th Nov 2014 6:14 pm
What is happening currently to the movement of Russian oil and gas through the trans-Ukraine pipelines? What is the liklihood that this flow will be disrupted this winter by known or unknown causes? And what will be the western European response?
Makati1 on Wed, 26th Nov 2014 7:14 am
Davy, better get used to anti-American facts being presented more and more everywhere. The world is turning away from the Empire in growing numbers. The hockey stick moment on the graph is fast approaching where the USSA will stand alone. Maybe you don’t want to hear it but it coming. You can be anti-China or Russia or any other ‘bad guy’, but that does not change where we are going.
Davy on Wed, 26th Nov 2014 7:38 am
OH Mak, get a life please. I don’t need your hollow patronizing. I am plenty used to your puk. You will see your Asia bubble pop when you see hunger and social unrest everywhere around you. It is coming very soon to your area. The most critical element in surviving the coming collapse is a manageable population capacity of your surrounding local. Asia is grossly in overshoot and you Mak, smack in the middle of a mega city. Sorry Mak, you need to hear some words of advice.