“The Same Math”: Expert Assessed Whether Russia Will Collapse Because of Oil Like the USSR

Economist Eric Naiman explained that the Russian economy is heading toward collapse due to the war against Ukraine, but for now, oil prices are keeping it afloat—though only temporarily, reports Politeka.

He discussed this on Valeriy Savchuk’s author program “Different People.”

"Putin has been lucky with oil prices. 99% of Russians and others, including many respected economists, attribute the survival of the Russian economy and Putin to some cleverness or other mythical fantasies. In reality, it’s just the oil prices. The Russian economy was a gas station before, and it still is. It also produces, of course, gas, diamonds, gold—quite a lot. Unfortunately, Russian land is rich in mineral resources and such. Although they have learned to grow crops well, like wheat and corn. But the key factor is high oil prices," explains Eric Naiman.

Before the U.S. and Israel attacked Iran, he says, the deepest metastases had already begun to appear in the Russian economy, which is why there was a relatively normal negotiation track, as oil was selling for $30–40 per barrel while the budget assumed $50. Nevertheless, the expert notes, oil prices have now risen, and the U.S. allowed the sale of Russian oil already on tankers, particularly to India, which is covering Russia’s problems with its own issues.

Still, he emphasizes, this does not solve the strategic problem—oil prices have risen now, but not forever. And Russians, he points out, hope to sell gas to Europe or China, but China doesn’t buy anything at a high price; Russia will just end up selling even more of its territory.

"The result is very simple. Oil prices will sooner or later fall. When the Soviet Union got carried away with petrodollars, it decided to attack Afghanistan; then oil prices collapsed threefold, and the Soviet Union also collapsed. Here it’s exactly the same—the same math," asserts Eric Naiman.