Russia Faces Collapse in Oil Prices like the One which Destroyed the USSR, Economist Says

Paul Goble
    Staunton, Mar. 25 – It is now widely accepted that the collapse in oil prices and hence in Moscow’s earnings from exporting petroleum at the end of the 1980s played a major role in the collapse of the Soviet Union. Now, Nikita Mitrofanov says, there is a real risk that the Russian Federation is on the brink of a similar collapse.
    Drawing on materials from a Russian Central Bank report to the Kremlin that was leaked to a Western news agency, the independent economist who writes the Chinese Threat telegram channel says that what happened in the 1980s could happen again if nothing changes (rosbalt.ru/news/2025-03-26/nikita-mitrofanov-rossiya-teryaet-dohody-ot-nefti-5353367).
    Because of Western sanctions and the changing relationship of supply and demand for oil, Russian exporters are now receiving approximately 15 billion US dollars a month, “one of the lowest figures for the last 10 to 15 years and an amount that could easily fall still further, according to Mitrofanov.
    At the end of the 1980s, the Soviet leadership “put all its eggs in one basket” and tried to make up for falling earnings as a result of falling prices by expanding production. “But the more effort it expended in that direction, the less profit each additional unit of production brought,” the economist says.
    And “as a result, all this became the precursor to the events of the 1990s.”
    The Russian economy now differs significantly from the Soviet economy of that time, Mitrofanov concedes, but the question remains: is it sufficiently different to preclude a disaster?  The answer to that is unfortunately far from clear.