Russian GDP collapses due to falling oil prices

Could this be what the Saudis are really hoping to achieve? Damaging both Russia and Iran by low prices?

Gross domestic product contracted 4.6 percent in the second quarter from a year earlier after a 2.2 percent decline in the previous three months, the Federal Statistics Service in Moscow said on Monday, citing preliminary data. That was worse than the median forecast for a 4.5 percent slump in a Bloomberg survey of 18 analysts. The Economy Ministry had projected that output shrank 4.4 percent in the period, calling it “the lowest point” for Russia.

http://www.bloomberg.com/news/articles/2015-08-10/russian-economy-s...

Add up all the affects of cheap oil. Hurting Iran and Russia, slowing the fracking revolution, discouraging new off shore developments, discouraging other oil exporters like Iraq from increasing production......seems like a no brainer for them to try it.

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Permalink Reply by Tim on August 11, 2015 at 9:32am

The chest-out, fist pumping Putin has lost some hop in his step the last 3-4 months, compared to the previous year.  So on that front, yes, it has had a major effect.

Saudi's output in July was very high, perhaps even record setting.  So there is clearly an agenda.  Ultimately, we will never know the exact reason.

What you think of locking in to home heating oil at $2.229 for 1 year?

Permalink Reply by Jim Litwinowicz on August 11, 2015 at 11:54am

Makes one wonder why they are supporting the lifting of sanctions on Iran.  That would drop a huge amount of additional crude on the market, driving prices down even further and for an extended time.

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