Russian Economic Issues

Today, the Russian ruble's value plummeted, losing nearly 9% of its value before rallying. At the end of the day, the ruble lost 'only' 4% of its value. While President Vladimir Putin has been enjoying widespread popularity in Russia due to the war in Ukraine, economic troubles in Russia could spell trouble for his regime. The ruble had already taken a hit due to recent economic sanctions following the war imposed by the EU and United States, taking the side of the Ukrainian government in the conflict. However, the ruble's troubles are not due to the war, but instead because of the recent drop in oil prices. Russia is one of the world's largest oil exporters (#2) and the value of a barrel of crude oil has significantly dropped in the last year. Russia's economy is heavily dependent on fossil fuel revenues, so the ruble's value has fallen due to the economic uncertainty surrounding global oil prices. A lot of this has to do with new technology used to extract shale oil and tar sands in the US and Canada, which have led to a large increase in oil supply, and cut the dependence of the US on foreign oil supplies. Also, OPEC (Russia, Canada and the US are not members) has not decreased its production of oil, which contributes even more to the high supply of oil in the global market. In the US, this has also caused gas prices to drop in recent months, but it has adversely affected many resource-rich countries, and is a good example of the resource curse and the over-reliance on fossil fuels in the economies of many nations.