Putin ‘Destroyed’ Russian Economy Save For Oil, White House Says

Top line

Russian President Vladimir Putin has sunk his country’s economy outside of still-lucrative oil exports, a Biden administration official said Monday, adding that Russia has largely withdrawn from the global economy amid its aggression in Ukraine.

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Key facts

Amos Hochstein, an adviser to President Joe Biden, told CNBC, “He owns all the oil, so that funds the war.”

“Putin has destroyed the rest of the economy,” Hochstein added.

According to the International Monetary Fund, Russia’s GDP will shrink by 3.4% this year, which is still below the 2022 GDP growth of other world powers such as the United States (1.6%), China (3.2%), and the United States. Positive but stable is much worse than expected. States (3.6%) and Japan (1.7%).

Much of Russia’s decline comes from the impact of sanctions from the US, the European Union and their allies, which have blocked almost all exports to hostile countries, but Russia’s oil trade is growing for petrol-rich lands: Russia’s energy export revenue will increase by 38%. That has reached about $340 billion this year, thanks to rising crude oil prices and eager buyers in China and India, according to Kremlin documents seen by Reuters in August.

Key background

After Russia’s February 24 invasion of Ukraine, the world’s second-largest oil exporter, and Europe’s biggest oil and natural gas provider, energy prices rose as uncertainty grew about what an impending Western response would mean for global markets. International benchmark Brent crude was at $92.51 a barrel on Monday, up 12% from a year earlier, while US gas prices rose 11% over the period. Rising energy prices pushed already soaring inflation to levels not seen in the US and Europe in more than 40 years, bringing the global economy to the brink of recession.

A large number

20%. According to how much Russia’s exports have shrunk since the attack began The New York Times.


The war has also pushed up global food prices as Russia blocked ships carrying grain from the ports of Ukraine, one of the world’s biggest agricultural producers. Over the weekend, Russia backed away from a long-awaited deal to resume exports, sending wheat prices up more than 5% on Monday.

Further reading

How Russia Pays for War (The New York Times)

Global food crisis back? Russia pulls out of grain deal after accusing Ukraine of drone attacksForbes)


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