Special Extra: Some Coal in Mr. Putin’s Stocking, Price of Russian Domestic Crude hits $12/barrel

Reuters reports that the price of crude oil on Russia’s domestic market has fallen to a shocking $12/barrel as the result of a supply glut.  As we have previously reported, Russian industry has virtually shut down because of the national financial crisis, and the lack of demand has pushed the price of domestic oil into a state of horrifying freefall.  Meanwhile, brutally high export tariffs have destroyed oil company profit margins on the international market as the price of oil has fallen well under $40/barrel, with Russia’s inferior Urals blend flirting with the $30/barrel barrier.  With no profitable outlets for it oil, Reuters quotes a trader with a Russian major as follows:   “We are about to start shutting down wells in Siberia.”

In yet more horrifying and undoubtedly related bad news, a Kremlin aide has admitted Russia may need to go begging for foreign loans in order to fund its budget next year, and may insist that all state-owned companies cut their dividend payments to investors in order to divert the cash to fill the Kremlin’s corrupt coffers.  The last time the Kremlin experienced a budget deficit, it solved it by simply cutting off wage payments to employees and letting them starve. Will that too soon be in the offing?

3 responses to “Special Extra: Some Coal in Mr. Putin’s Stocking, Price of Russian Domestic Crude hits $12/barrel

  1. it makes me wonder what they’ll pay for the 2014 Sochi games with… er, no it doesn’t.
    I know, they’ll pay for it, with someone else’s blood.

    Thank you for many excellent posts to your blog in the past year, and for keeping us informed regarding the demise of the federation.
    in freedom…


    Thanks for your support! And your excellent question! We wish we could answer it. Perhaps they won’t pay at all and the whole thing will go belly up. Or maybe they’ll just skimp on security and have another Munich.

  2. In the meantime, IOC Executive board listened to Sochi 2014 President Dmitry Chernychenko and Russian Deputy Prime Minister Dmitry Kozak as they underlined the development of the Sochi Games over the past few months and the strong support that the Games have within Russia.

    Not much changed in IOC since 1936 and 1980. Corrupt idiots!

  3. Russia forces OSCE mission to Georgia to be withdrawn, Russia evicts UN mission from Abkhazia. Russia continues to occupy strategic Georgia village of Perevi.

    I suspect the Russians are going to try and distract the suffering Russian masses from their plight with a second “short victorious war” in Georgia in the new year. I hope it turns into another “Russo-Japanese war” style debacle.
    Given the shambolic state of the Russian military I hope it backfires on them big time.

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