A follow up to this post: Wednesday, October 15, 2014 : Oil Wars? US/Saudi Arabia vs Russia/IranIt's as if the US is wanting to drag the entire globe down even further then they did already with their mortgage backed security scam? More than half of Russia's revenue comes from oil. LONDON (CNNMoney)
Finance minister Anton Siluanov calls that an "alternative economic reality." Oil currently trades around $80 a barrel. Siluanov warned that cuts will be needed since the budget doesn't reflect the hits Russia's economy has taken from the standoff in Ukraine and falling oil prices. When Russian parliament passed the draft budget for 2015-2017 last week, it assumes that oil trades at $104 a barrel for 2014 and $100 for 2015-2017. That might have made sense when oil traded at $115 in June, but not now. The result: Russia has a huge hole in its books. And it might get worse. Goldman Sachs (GS) and top bond investor Jeffrey Gundlach predict oil could fall as low as $70 in the coming months.
Related: Crashing oil prices could crush Vladimir Putin
The finance minister is already talking about the need to cut spending by 10% to offset the "difficult economic situation." "The budget can not constantly have expenses that were made at different economic reality," Siluanov told the parliament. More than half of Russia's revenue, between $191 and $195 billion last year, comes from oil and gas revenues. Sanctions imposed on Russia by Western countries in response to the Ukraine conflict have also slowed down economic growth. The World Bank has already slashed its projections for Russia's GDP to 0.5% in 2014 and a mere 0.3% in 2015
I have some issues with this article. Out of context quotes with no link back provided to original source. Something I can't do without having my credibility immediately challenged but apparently CNN can do it... Sigh. I highly doubt Putin is unaware of what is going on and how this oil war will affect Russia. So the whole Putin/alternative reality stuff is just written to make the gullible reader 'feel good' about all this stupidity.It also reads like gloating. Yes,this is economic warfare, but, I am quite certain Russia planned for this inevitability. Knowing full well they are in NATO crosshairs.One thing the CNN alternative reality article failed to mention is how much economic damage these sanctions are doing to Europe- Allies so called of the US. Not quite sure why the EU needs a friend like the US?Earlier today: Cost of War on ISIS- 1 Billion dollars and counting, expanding, consuming, growing!