Oil Prices in the World Economy
Oil is very important in today’s society. The western countries are highly dependent on it. That is why oil prices have such a big influence on the industrial countries’ economies.
Russia has huge supplies of natural resources and is the main exporter of oil and oil products, which means that they have a big influence on the economy too.
There are pros and cons with being the main exporter. If economy is going well and the oil prices are high, then Russia will make great profits, and their economy will grow. On the other hand, if the oil prices are low, Russia will be in trouble. Their economy’s development will turn, and they will suffer great losses.
For example, in 1998 Russia suffered under a big financial crisis. They had big debts to lots of other countries and their public services had big deficits. This was because of the Asian crisis that spread, and because of great plunges in oil prices. The government increased money production and this meant big inflation. In 2000 when Putin first became president in Russia, the oil prices increased and the government reformed and regulated prices. This meant an upsurge in the economy and they made huge profits. However in 2008, crisis hit all over the world, and Russia again started having problems selling their oil. This meant that the economy they had just built was severely affected, and they suffered numerous losses. It has now started turning; today Russia’s economy is growing and the oil prices are high. Based on this, it is evident that the price of oil all around affects Russia’s economy a lot because they are the main producer and exporter of it.
Written by Emma I + more
Russia has huge supplies of natural resources and is the main exporter of oil and oil products, which means that they have a big influence on the economy too.
There are pros and cons with being the main exporter. If economy is going well and the oil prices are high, then Russia will make great profits, and their economy will grow. On the other hand, if the oil prices are low, Russia will be in trouble. Their economy’s development will turn, and they will suffer great losses.
For example, in 1998 Russia suffered under a big financial crisis. They had big debts to lots of other countries and their public services had big deficits. This was because of the Asian crisis that spread, and because of great plunges in oil prices. The government increased money production and this meant big inflation. In 2000 when Putin first became president in Russia, the oil prices increased and the government reformed and regulated prices. This meant an upsurge in the economy and they made huge profits. However in 2008, crisis hit all over the world, and Russia again started having problems selling their oil. This meant that the economy they had just built was severely affected, and they suffered numerous losses. It has now started turning; today Russia’s economy is growing and the oil prices are high. Based on this, it is evident that the price of oil all around affects Russia’s economy a lot because they are the main producer and exporter of it.
Written by Emma I + more