Economic warfare comes in many forms:
boycotts, tarrifs, restrictive trade regulations, and aggressive price cutting to name a few. Russia is the object of the west's trade sanctions in retaliation for its
annexation of the Crimea and support of eastern Ukraine separatists. No economic weapon will have as much effect on the Russian economy as the current collapse in oil prices. The price of oil is indirectly controlled by western multinational oil companies and their royal Saudi allies. OPEC, the oil cartel dominated by the Saudis, recently decided not to cut production and leave its target at 30 million barrels/day. Price is based on the amount of oil that reaches the international market, and if you have your hand on the pump, you control the price. Experts figure that Russia needs a price of $100/barrel to run its economy. Right now the price is hovering around $70. Consequently the rouble is falling dramatically. Russia's central bank said there is sufficient liquidity in the market for now and that it has prepared economic forecasts based on an oil price of $60. Falling oil prices are costing Russia $100bn/yr compared to $40bn/yr in western sanctions. Besides market manipulation, China's economic slowdown has reduced world-wide demand. Bakken shale formation crude has contributed to an increase in domestic US supply. Some shale producers could still breakeven at $40/barrel. Russia could cut its oil production to prop up prices, but that decision would also hurt the Russian economy. As the sanquine Vladimirovich
said last week, "Winter is coming..." Is your goose fat?
from $12 low in 1980's to $147.50 peak in 2008, how low can you go?
