How falling oil prices could weaken Russia’s war in Ukraine - Expert explains
Photo: Russian President Vladimir Putin (Getty Images)
The decline in oil prices creates significant challenges for the Russian economy, which heavily relies on oil and gas revenues, said Andrii Dlihach, a professor at Taras Shevchenko National University of Kyiv and head of Advanter Group, in a comment on the YouTube channel RBC-Ukraine.
According to the expert, in the context of the transformation of the global order, these changes may work in Ukraine's favor.
"The new world will demand the competencies that Ukraine possesses – strength, adaptability, courage, and speed. All of these are advantages that work in our favor. The question is how we will use these opportunities," the analyst said.
He noted that it will become increasingly difficult for Russia to finance the war, as oil and gas revenues, which two years ago significantly exceeded military expenditures, have now drastically decreased.
Furthermore, the expert reminded that Russia's federal budget is one-third dependent on energy resources income, and the National Wealth Fund is nearly depleted – it is estimated that only a few months' worth of resources remain.
"Our previous forecast predicted the depletion of the fund by September, but now we expect it may happen as early as August," he clarified.
However, despite these difficulties, the Kremlin does not plan to stop. According to the expert, Russia will attempt to seize as much Ukrainian territory as possible over the next two to three months in order to impose favorable terms for a ceasefire.
"This is an attempt to win a pause: to weaken sanctions, rearm, and prepare for the next phase of the war," the analyst explained.
In his view, without additional financial and personal sanctions, as well as without strengthening the trade embargo, Russia will remain capable of waging war even under economic pressure.
It is worth noting that political technologist Taras Zahorodnii, in a comment to RBC-Ukraine, mentioned that the Russian elite may remove Vladimir Putin from power after oil prices reach a critically low threshold.
As of the morning of April 7, the decline in global oil prices led to a drop in the price of Russia's flagship Urals crude to $50 per barrel.
