From the Kremlin to Caracas, how oil collapse changes everything

As the price of a barrel falls to below $50 for the first time in years – to a third of its value just a few months ago – petrol will be cheaper but the shockwaves mean crisis for oil-producing nations and further instability for a battered global economy

Russia is lurching towards a major economic crisis, experts predicted yesterday, following news that the price of oil had slumped to under $50 (


With oil prices tumbling and his credibility at stake, Russia’s prime minister, Vladimir Putin, yesterday insisted that the economy was still robust. The country would survive the global financial turmoil – which he blamed on the US – he told delegates from his United Russia party.

But the Kremlin is aware that any loss of confidence in the Russian economy could lead to a loss of confidence in Putin and his ally Dmitry Medvedev, who took over from Putin as president in May.

Putin said his administration would do everything it could to prevent a recurrence of the last oil-related crash in 1998, which saw the savings of many ordinary Russians wiped out. But the plummeting oil price leaves him little room for manoeuvre. Experts suggest Russia’s economy is facing profound difficulties, despite two huge stabilisation funds accumulated during the booming oil years.

Guardian