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World View: Russia's Troubles Rise as the Ruble and Oil Prices Fall

World View: Russia's Troubles Rise as the Ruble and Oil Prices Fall

This morning’s key headlines from GenerationalDynamics.com

  • Russia’s troubles rise as the ruble and oil prices fall
  • Russia loses influence in East Ukraine as economy weakens
  • France adopts new law to stop young people from going to Syria to be jihadists

Russia’s troubles rise as the ruble and oil prices fall

Underground gas storage facility in Ukraine (Bloomberg)
Underground gas storage facility in Ukraine (Bloomberg)

Oil markets fell sharply again on Thursday, with U.S. crude falling to$78 per barrel, and North Sea Brent Crude falling to $83 per barrel.Oil prices have been falling because of a combination of increasedsupply and decreased demand. Oil demand is falling because of apotential European recession and slowing Chinese growth. World oilproduction has been growing, particularly in the United States whereoil from fracking has been surging. Saudi Arabia has been cuttingprices and increasing production, apparently with the intention oftrying to make U.S. oil production unprofitable, but in doing sothey’re pushing oil prices down further. Some analysts are predictingthat it will reach $70 per barrel.

This is good news for people will cars, but it’s bad news for Russia’sgovernment, which depends on oil income. Russia has budgeted for oilto be priced at $114 per barrel or more, an assumption that seemedfairly reasonable only a few months ago.

The value of the Russian ruble has also been plummeting, and fell 3.6%on Thursday, the biggest drop in six years. The fall in the ruble ismostly due to the fall in oil prices, but also due to the sanctionsimposed by the West for Russia’s invasion of Ukraine and annexation ofCrimea. Reuters and Bloomberg and Citibank

Russia loses influence in East Ukraine as economy weakens

The election last week by the East Ukraine Russians of leaders of theself-designated Donetsk People’s Republic and Luhansk People’sRepublic is just one sign that Russia’s president Vladimir Putin islosing influence in East Ukraine. Because of its own economicproblems, Russia is unable to provide much financial aid to Donetskand Luhansk, where the economic situation is critical.

Schoolteachers and other government officials have not been paid sinceJuly, when Ukraine’s government in Kiev cut off funding. State-ownedcompanies in Donetsk and Luhansk have no idea how they’re going tosurvive. In many villages there’s no power, little water, and fewmedications. The real test will come in winter.

Even worse, disputes between leaders in Donetsk and Luhansk aregrowing, the citizen militias are disintegrating. Today, there’s noreal leader with whom anyone — Moscow, Kiev, Nato — can negotiate.

Der Spiegel

France adopts new law to stop young people from going to Syria to be jihadists

More than 1,000 young people from France have joined jihadist groupsin Syria and Iraq, more than from any other country. Entire familieshave joined jihadist movements, including about 100 young Frenchwomen. Even upper class families are shocked when their childrensuddenly disappear and are later discovered in Syria, the boys to beused as cannon fodder and the girls to marry the jihadists.

France on Tuesday adopted an anti-terrorism law that will impose atravel ban on anyone suspected of planning to wage jihad. It alsobrings in punishment for “lone wolves” who plan terrorist attacks ontheir own, and allows authorities to block entry to any EU citizen ortheir relatives if their presence in France constitutes a threat.Al Arabiya and Der Spiegel

KEYS: Generational Dynamics, Russia, Ukraine, U.S. Crude, Brent Crude,China, Saudi Arabia, Ukraine, Crimea,Donetsk People’s Republic, Luhansk People’s Republic,France, Syria
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