As we have seen over the past eighteen months or so, Russia (and by Russia I mean Russian President Vladimir Putin) doesn’t really care what the rest of the world (especially the West) thinks of them and by their multiple acts of defiance the rest of the world should care and to take it further the world should be worried; very, very worried. To that extent we have seen such things as Russian military planes and bombers flying extremely close to other country’s boarders and this has happened as recently as March 24th when a Russian TU-22 bomber flew over the Baltic Sea with its transponder turned off, this action led to NATO and Swedish military jets being scrambled to escort them away. Also just the other day Russia threatened to aim nuclear missiles at Denmark’s ships if she joins the NATO shield.
This has also played out in the crisis in Ukraine where Putin annexed the Crimean peninsula (by a so-called referendum with 97% in favor) and I believe that it’s only a matter of time before more Ukrainian territory follows (much of the east is already under the control of Russian backed rebels who are flying the Russian flag over government buildings. To see a detailed timeline of the crisis in the Ukraine click here.
What does this have to do with the declining oil prices that we have seen? Well over the past year or so oil prices have plunged about 60% going from around $115 a barrel to it hovering around $50 a barrel presently. Now taking into consideration that oil accounts for 70% of all Russian exports and 52% of their Federal budget, and then compounding that with the economic sanctions from the west (which has put the ruble in a nosedive) then you have a recipe for disaster.
Imagine your salary being cut in half, wouldn’t you be pissed off? I know I would be, I would probably be acting like a spoiled toddler grabbing at everything while shouting “mine, mine, mine”! We all know Putin is probably the richest man on the planet with secret bank accounts reportedly worth hundreds of billions of dollars, however it’s not his money that he is worried about, its his power; and its the people who keep him in power who are worried about their money, money most likely tied up in the oil industry.
Let me be clear, when I refer to the “people” I do not mean the average every day Russian who could care less (and probably doesn’t even know) the daily goings on of their government, but I am referring to the people who keep Putin in power, his large inner circle of “friends” who keep him in power as long as he keeps stuffing their pockets (not to mention that Putin has cut all government worker salaries by 10%).
With all of this being said it is clear that the more and more desperate Putin gets the more reckless he will become. Any and all political opponents are usually imprisoned or murdered (most recently Boris Nemtsov who was shot and killed on 02/27/15). He is doing as he pleases knowing full well that no one will stop him (until maybe he is knocking on Kiev’s door).
Let us not forget that expansionism is in Putin’s blood, and I for one would be shaking in my buty’s (boots) now if I lived in Estonia, Latvia, Lithuania, Belarus or Poland…But that’s just me.