Source: Fortune
Summary
Russia’s economy was set to benefit from the US-Iran conflict, with oil prices soaring after the closure of the Strait of Hormuz. However, Ukraine’s drone attacks on Russia’s oil export hubs have disrupted about 40% of its crude oil export capacity, forcing the Kremlin to deprioritize some exports and protect consumers. The attacks have also led to a ban on gasoline exports to combat domestic fuel shortages. The economic strains on Russia’s economy are attributed to its invasion of Ukraine, sanctions, and high inflation.
Our Reading
The numbers tell one story. Russia’s oil revenues were in decline, but the US-Iran conflict rescued them. Then, Ukraine’s drone attacks disrupted 40% of Russia’s crude oil export capacity. The Kremlin is now forced to protect consumers and ban gasoline exports. The economic strains are real, with high inflation, weak oil revenue, and a widening budget deficit. The banking crisis is possible, and the war with Ukraine continues to take its toll.
Russia’s economy is experiencing a perfect storm of disruptions.
Author: Evan Null
