"Pacing inside the Kremlin last weekend, as news feeds churned out minute-by-minute reports of Donald's Trump's Venezuelan coup, Vladimir Putin may have been wondering what it would mean for the price of oil. Crude oil has lubricated the Russian economy for decades far more than gas exports to Europe and so the threat of falling oil prices, prompted by US plans for control of Venezuela's rigs, will have been a source of concern."
"US sanctions on Rosneft and Lukoil last year and a rise in the rouble, depressing income from oil sales in dollars, have already reduced receipts for Moscow. Optimists argue that after four years of war in Ukraine, Putin is increasingly vulnerable because Russia's financial position is precarious. A fall in oil prices, they say, would have a catastrophic effect on his ability to fund the war and continue grinding down Ukrainian resistance."
Venezuela's potential revival of oil production threatens to increase global supply and push down crude prices, directly affecting Russia's oil-dependent economy. US plans to control Venezuelan rigs and earlier sanctions on Rosneft and Lukoil, combined with a stronger rouble weakening dollar receipts, have already reduced Moscow's oil income. Some analysts predict millions of additional Venezuelan barrels could come online soon. Reduced oil revenues would constrain Russia's finances and its ability to fund the war in Ukraine. Russia's economic growth has slowed, interest rates and taxes are high, and demographic and labour pressures compound fiscal vulnerability.
Read at www.theguardian.com
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