By Mark Sumner / Daily Kos
Oil and natural gas aren’t just a part of Russia’s economy, they are the economy. Up until 2014, oil accounted for 50 percent of revenue going into the budget. As long as oil and gas prices were high, Putin was able to float along, using oil profits to prop up the Russian economy and his own popularity. But as oil and gas fell, so did Putin’s ability to pretend that his policies were bringing improvement. Since 2014, the value of the ruble has plunged to a third of its former value against the dollar.
The reason is the same as the reason the coal industry is going under: fracking. Fracking for oil and natural gas has filled the US market to overflowing. It’s the reason that gas is $2 at the pump, the reason that the largest coal companies in the world are bankrupt, and the reason that over 160 oil companies have also gone bankrupt this year. Prices are so low, companies and countries that depend on fossil fuels for revenue are feeling a huge squeeze. [Read more...]
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