THE IMPACT OF OIL PRICES ON THE POST SOVIET COUNTRIES ECONOMY AFTER 2010

Abstract

Since 2010, fluctuations in oil prices on the global market have significantly impacted the Russian economy. Russia's economy is heavily reliant on the export of natural resources, particularly oil and gas. The changes in oil prices during these years have led to substantial shifts in the country's economic performance. From 2010 to mid-2014, oil prices on the global market were at high levels, with the price per barrel averaging around 100 USD. These high prices provided a substantial revenue source for Russia's state budget and supported the country's economic growth (Baumeister, C. and Kilian, L.,2016). During this period, taxes and duties from oil made up a large portion of the state budget. These revenues were directed towards infrastructure projects, public services, and social expenditures, creating stability in the economy. As a result of high oil prices, foreign investments in the country increased, financial markets stabilized, and the ruble strengthened. From mid-2014 onwards, oil prices began to decline sharply, falling to as low as 30 USD per barrel by early 2016. During this period, the decrease in oil prices significantly reduced Russia's export revenues and dealt a substantial blow to the state budget. The budget deficit increased, leading to an economic crisis.