casualtiger2
Regular
330 messages
joined Apr 2022
RUSSIAN OILMAGEDDON 2023 | Crashing oil prices are gutting the Russian economy
I’m a little too lazy to explain this all out loud, so here’s the breakdown for anyone who doesn't feel like digging through the noise:
- Russia's entire budget basically hinges on selling oil and gas.
- Because of sanctions, their oil sales in 2022 dropped by over 20% compared to 2021.
- Things look even bleaker for 2023—since the European Union isn't buying anymore, they have to ship everything by sea (aside from those limited pipelines toward China),
which takes five to six times longer to transport, and volume is capped—plus, longer routes mean higher costs and more expensive shipping logistics.
- It’s the same story with gas. In 2022, sales were down 40% (ignoring the first half of the year when the European Union was busy filling up storage), and the pipelines to China and India
don't have nearly the capacity of the old ones to the European Union—not to mention LNG transport is even more restricted. The European Union will likely stop importing Russian gas entirely in 2023,
which is just going to make everything worse.
- On the flip side, oil and gas prices have been cut in half since their peak mid-year. Now, Russia HAS to sell what little they have left at $50 (even though the price cap is $60)—and they're selling to China and India at even cheaper rates, practically at the cost of production. Same goes for gas.
- Other sectors of their economy and industry are flatlining, most seeing at least a 20% dip compared to 2021, and 2023 could be even uglier.
- This hits the budget hard—the same budget that pays the salaries of about 30 million Russians. When you consider there's zero investment coming in—and there won't be, since the state is basically the only major investor left—and the budget was already running a deficit in 2022 (despite a decent first half), 2023 is looking grim, especially with the massive spending spike for the war.
- No new investment, a stagnant economy, and inflation is steadily climbing. For what it's worth, they have a decent director at their state bank—she almost quit back in February, but I assume they gave her the choice between staying or "taking a tea break" by the window—but even she can't fight basic economic laws.
- Right now, they're plugging the budget hole with reserves, but those are starting to dry up.
Conclusion: 2023 is going to be an economic disaster for Russia. If the war and sanctions drag into next year, things could get even worse—regardless of what the so-called Russophiles claim. They love to say Russia can fund this forever because they're resource-rich, or that Russians are used to suffering, or that everything is going according to some evil gnome's master plan.
The only thing that might save Russia is if they quickly lose the war in Ukraine!
We saw this coming at the start of the year—now, it's not just a prediction, it's actual data from 2022.