Depleted oil well: Russia's drying up greatness
Every day, Russian officials of various ranks urge the world to think humanism and human rights and finally lift Russia sanctions. Of course, they say, this must be done exclusively to help tackle coronavirus and, first of all, in the countries who are Russia's BFFs: Syria, Venezuela, Iran, and North Korea. In this context, Russians don't directly mention themselves - the pride of the "great power" just won't let them do it. But the logic is obvious: tread on sympathy and convince the West to accept the "humanitarian limit of sanctions". The main thing is to create a precedent. It is no coincidence that Moscow branded as blasphemy, cynicism, and Russophobia Ukraine's move to block the Russian draft resolution of the UN General Assembly on sanctions.
The Kremlin doesn't intend to change its plans toward Ukraine because the occupation of Crimea and Donbas is one of the pillars of Putin's regime
The Kremlin doesn't intend to change its plans toward Ukraine because the occupation of Crimea and Donbas is one of the pillars of Putin's regime. However, against the backdrop of a disastrous collapse in oil prices, Russians, by all means, need to have sanctions lifted and open their way to the western market of cheap lending.
In Ukraine, it is generally accepted that the young and inexperienced Zelensky found himself in a "perfect storm": Russian bullets targeting Ukrainians, the economic crisis, and the pandemic. However, Putin, albeit more experienced, has also fallen into a perfect storm of his own: the economic recession that has been looming over Russia for a few previous years coincided with quarantine-related losses, plus the oil price collapse. It turned out that not only the presidential terms that were reset in Russia but also the infamous "stability". It turned out that, while rising from its knees, Russia has relied solely on its oil rigs. The oil industry is, in fact, a state-forming sector in Russia.
It is no coincidence that the Russian Federation occupied Ukrainian territories in 2014 – back then, oil cost more than $100 per barrel. From that moment, the hydrocarbon god turned his back on Putin as prices started sliding, remaining over the last five years within the corridor of $50-70 per barrel. The result was inevitable: since 2014, real incomes of the Russian population have been falling. But now came the real fiasco. Oversupply of oil amid coronavirus lockdowns drove prices down, sometimes even to negative values.
Russian leaders, hiding out from the epidemic in their secret bunkers, have nothing left to do but to bite their nails from anxiety. Who knows, maybe in a little while they'll even have to smash Russia's piggy bank – the National Welfare Fund worth nearly $120 billion. Deutsche Bank experts have calculated that this money will be gone in two years if Russian Urals oil costs no more than $15 per barrel, as it is now. If the price of this brand is $30 per barrel, the agony can be extended for some six years.
Russia's show-off moves in the international arena are directly dependent on hydrocarbon prices
In any case, Russia's show-off moves in the international arena are directly dependent on hydrocarbon prices. This means that there will be less will to bully Ukraine, although Russians will always find the money for war.
The Kremlin doesn't dispute such forecasts, preferring to water them down by saying, "long-term planning is impossible now." They are waiting for oil prices to rise.
But what if they don't?...