Impact of oil prices on Russian economy

Russian economy depends largely on crude oil exports. In feb 2014 crude oil prices started to slide down due to the boom in shale oil production in U.S.For every 1 $ decline in crude oil prices Russia losse billions of dollar .

russian-economy

Decline of Russian economy can easily be seen from the decline in Russian currency(ruble).By comparing the graphs of crude oil prices and exchange rate for rubble against dollar symmetry can be seen as the crude oil prices began to go down, Russian rubble also started to decline.Oil prices fell from 100$/barrel in Feb 2014 to 60$/barrel in Dec 2014.At the same time rubble value fell from 0.03 $/Rubble to 0.015 $/Rubble.To bear the burden of crisis Russian bank also increased the interest rate.

Now as OPEC has reduced production from nov 2016 oil prices have started to move up and so does the rubble. Russia is not the only country to suffer from oil price crisis, all OPEC countries are suffering.If OPEC decides to reduce the production oil prices can again go up.But due to the fear of losing market share OPEC countries are not ready to reduce production.

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