The Oil Price, Russia and OPEC.

(Transcript from The Viewpoint Podcast)

The price of oil has made a major shift downward in recent weeks, falling to around $60 a barrel for North Sea Brent Crude, and below $60 for West Texas Intermediate. For most of us, it will mean that it will cost us less to fill up our cars, and prices for the goods on our shelves should start falling because transportation will start costing less as well.

But there's much more to it than that, especially for Russia. Oil revenues are a big part of their government's income, and the drop from over $120 a barrel to around $60, means that Russia's budget, which was calculated at a higher price, will not be able to spend as much money as they previously thought. The drop in the Oil price even sent the Russian Rouble shooting up against the dollar, to almost 80 roubles to the dollar, before settling OPEC even decided not to cut production to force prices higher, and whilst most saw that as a shot across the bows of US shale oil producers, Russia's aggression against Ukraine may have also played a part as neither the US nor Russia are part of the international cartel.

Russian President Vladimir Putin held his usual end of year press conference this week, and like previous Soviet Premiers and dictators worldwide, blamed the West for what is happening with his economy. And whilst it's true that the West's economic sanctions have hurt Russia to some degree, OPEC's refusal to cut production of oil in order to raise the price on international commodities markets will do far more to damage the Russian economy than the west's sanctions.

And who are these OPEC members who will hurt Russia's economy so badly? Algeria, Angola, Ecuador, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, Venezuela and the Islamic Republic of Iran. Not a single western country in the cartel, not even the UK. Maybe Putin should get some of his Russia Today buddies to start going after Iran's Press TV.