ISW explained Putin's fear of possible decrease in oil prices worldwide
A drop in oil prices will not allow the Russian dictator to continue the war (Illustrative photo: Getty Images)
Russian President Vladimir Putin is attempting to convince US President Donald Trump to abandon his plans to lower global oil prices. If this happens, Putin will be unable to finance his war against Ukraine, reports the Institute for the Study of War (ISW).
The report reminded of US President Donald Trump's statement that oil prices are currently high enough for Russia to continue its military actions in Ukraine and his call for OPEC to reduce the price of oil.
In an interview on January 24, Putin responded to Trump, stating that both Russia and the US are major oil producers and consumers and that too high prices are bad for both the American and Russian economies.
The President claimed that both Russia and the US rely on energy resources for domestic industries and that too low prices would undermine investment opportunities for energy companies.
Thus, Putin attempted to portray the more modern and diversified US economy as functioning similarly to Russia's oil-dependent economy, which is largely reliant on revenue from energy exports.
Putin's great concern
The ISW is convinced that a drop in oil prices will lead to a decrease in Russia's federal budget revenues and pose a risk to the stability of the Russian regime. It will also reduce Russia's share in the global oil market and its economic influence on the world stage.
Furthermore, the Institute notes that Putin's emphasis on the need to maintain oil prices for the benefit of energy company investments also shows how much he feels the need to please the elite of his inner circle, who have personal interests in the energy sector.
The department is also convinced that Putin's focus on the interests of his closest circle contrasts with the greater attention paid by American leaders to the population, which has the right to vote, and to a broader range of business interests that benefit from lower energy prices.
"Putin's attempt to portray lower oil prices as against US interests suggests that Putin is afraid of the harm such policies would cause Russia and is trying to persuade Trump to abandon these proposals without having to concede to Trump’s insistence on meaningful negotiations to end the war," the ISW said.
US proposal to lower oil prices
Recently, US President Donald Trump called on Saudi Arabia and OPEC to reduce oil prices. In his opinion, this would lead to the quicker end of the war between Ukraine and Russia.
Official Kyiv has proposed setting the price at $30 per barrel, which would prevent Russia from further financing its war against Ukraine.
At the same time, Saudi Arabia's Ministry of Economy is focused on the long-term stability of the oil market.
