Russia under economic pressure

Circumstances are rapidly changing for Russia. Russia’s economy is heavily dependent upon her exports of oil and natural gas. In February this year (2014), the Economist magazine stated that Russia got 74% of her foreign revenue from her exports of oil and natural gas. Back then the price of oil was above a $100 a barrel. Not now!! Oil and gas prices have plummeted. Saudi Arabia is able to profitably export the oil at well below the Russian prices. Russia has huge maintenance costs as she has to transport her oil in long pipelines through the frozen wastes. According to Bloomberg she needs an oil price of about $104 a barrel to balance the budget. Currently, the oil price has dropped to only $78 a barrel.1

Saudi Arabia appears concerned about the way Russia has moved on Crimea and Ukraine, and what Russia is planning to do in Europe this winter. Winter is rapidly approaching and Russia may well exploit winter as she had done many times before. The bulk of Russia’s pipelines pass through Ukraine to Europe, and Europe and Ukraine depend heavily on Russia for gas and oil, especially over the often bitter European winters. Many European countries would be brought to their knees without Russian oil and gas for heating their homes, factories and transport.

However some countries like Poland that greatly fear Russia, have attempted to obtain secure supplies of oil and natural gas such as LNG (liquid natural gas) in shiploads from the Middle East. Poland hopes to berth the ships in ports where the pipelines from Russia meet the sea and then back flow the Middle Eastern gas through the pipelines into central Poland.2 Poland remembers with fear WW2 and the days when she was a Warsaw Pact country controlled by Russia.

Other countries seem to have expected this problem of the supply of gas and oil coming overland through Ukraine. Germany and, to a much smaller extent, France have invested in the Nordic pipeline from Russia passing through the Baltic Sea and therefore not crossing any country that might not support Russia.

Russia’s current economic situation

After taking Crimea in March this year, Russia has been facing boycotts from many of her trading partners. Germany is Russia’s largest trading partner and she has tried to restrain Russia. The effect on Germany, and of course Russia, has been dramatic. The economy of both those countries has nose-dived over the last month or so. Russia’s exchange rate, particularly, has moved back by about 30% in just five months.3

At the same time, the Western investors are rapidly pulling their money out of Russia. In the last few months they have pulled the equivalent of $100 billion out: an increase of 64% on last year.4 You can easily understand businessmen not trusting Russia and wanting to get their investments out. This has caused Russia’s exchange rate to plummet. Desperate to keep the money in Russia, the Russian government has raised the interest rate on her bonds to 9.41%.

Now the Russians themselves are watching the value of their money collapsing and wondering where it will end. They have joined the foreign businessmen and are trying to change their savings into foreign currencies or gold. That has only further escalated the decline in the weakness of the rubles buying power.

How long has Putin got?

Historically, Russia is not self sufficient with food. In the 1980s, under the same circumstances, Russia had to pull their troops out of all the Warsaw Pact countries and allow Russian-occupied Eastern Europe to become independent. This happened in 1989 with the fall of the Iron Curtain (25th anniversary of which is being celebrated right now).

Putin has financial reserves but he must act soon to preserve the Russian economy or back out. He is hardly likely to do that. He has known all along that what we are seeing had to happen. His only alternative is to move swiftly. Terrifying as this may be, we of all people are really the only ones that can be encouraged by this ominous scene.

What will Putin do?

Brother Thomas commented on this in Elpis Israel page 367 when he said, “Politicians speculate as though money were omnipotent; and we hear “financial reformers” predicting the inactivity of Russia and Austria for want of funds! Where did the barbarians procure funds for the overthrow of the Western empire in the fifth and sixth centuries? Did they not support themselves by the spoil? Let the Russian treasury be as empty as it is said to be and its expenditure exceed its revenue by double the alleged deficit, it will only operate as a pressure from within, causing the Autocrat to “enter into the countries and overflow and pass over” (Dan 11v40), and to enrich himself with the spoil of those he is destined to subdue.” Putin is threatening to do just that!!

Putin’s threats

Putin has been mounting the number of threats made as tensions increase. Vladimir Putin threatened nuclear war over Ukraine: “I want to remind you that Russia is one of the most powerful nuclear nations. This is a reality, not just words”.5

The Daily Mail printed this: “Shockwaves reverberated through Eastern Europe tonight after Vladimir Putin boasted he could invade five NATO capitals inside two days: ‘If I wanted, Russian troops could not only be in Kiev in two days, but in Riga, Vilnius, Tallinn, Warsaw or Bucharest too,’ Putin was quoted as threatening, according to Ukrainian president Petro Poroshenko. All are former USSR or Soviet-bloc cities, and apart from Ukraine their countries are now NATO and EU members”.6

“The world is on the brink of a new Cold War. Some are even saying that it’s already begun,” Gorbachev said at an event marking the 25th anniversary of the fall of the Berlin Wall, close to the city’s Brandenburg Gate.7

Putin may not be the Gog but he certainly lives up to the description of the great Russian leader. The frightening language he has used as quoted above fits what we would expect from such a leader: “… A king will arise, a proud-faced, ingenious-minded man. His power will grow greater and greater, though not through any power of his own; he will plot incredible schemes, he will succeed in whatever he undertakes, he will destroy powerful men and the holy ones, God’s people. Such will be his resourcefulness of mind that all his treacherous activities will succeed. He will grow arrogant of heart and destroy many people by taking them unawares. He will challenge the power of the Prince of princes but, without any human intervention, he will be broken” (Dan 8:23-26 Jer Bible).

Germany under pressure to compromise

Germany led by Chancellor Angela Merkel has brought pressure on Russia, boycotting many of Russia’s goods. However, she has come under strong pressure from the German business world to ease back on these sanctions. Russia is Germany’s largest trading partner. The business world, as a result, told Angela Merkel that their GDP would go into the negative, German exports would fall and their unemployment would rise dramatically, possibly to 30,000. German companies that reap substantial revenues from Russia could be hard hit.8 It is unusual, though, for the business world to involve itself in international decisions, but it shows that there is significant pressure on Germany for her to align herself with Russia. This is exactly what we would expect from Ezekiel 38:2.

France refuses to supply contracted naval vessels

France made contracts several years ago to build a number of sophisticated naval vessels for Russia. Part of the deal allowed France access to a percentage of the Russian oil coming through the dedicated Nordik pipeline that supplies Germany. However, in September, only a couple of months ago, France refused to release to Russia the first ship, even though some 400 Russian sailors had arrived to pick it up. This was an endeavour by France to put pressure on Russia because of its occupation of parts of Ukraine. No doubt she hoped Russia would back down and change its aggressive stance.9

Brother Thomas expected a different spirit from France than that of Germany. “France … will send her conquered and crestfallen hosts to do battle for the Autocrat against Britain on the mountains of Israel.” (Exposition of Daniel, page 88). Yes, France will certainly be involved in the invasion of the Middle East but she will not be as willing as Germany.

Russia’s final move

Russia must act soon before she is crippled by her weakening economy. She will take Turkey then finally come down into the Middle East and into Israel, “to carry away silver and gold, to take away cattle and goods, to take a great spoil” (Ezek 38:13). Let us make ourselves ready for the great events soon to transpire on the earth.

References:

  1. Oil-price.net–Nov 10, 2014
  2. DW–March 7, 2014 “Europe has little reason to fear Russian gas cut-off
  3. Forbes–Nov 7, 2014 “A Plunging Ruble Shows Russia’s Spiraling Decline”
  4. The Business Word–Nov 10, 2014 “Russia considers capital controls to stop flight of money”
  5. The Conservative Post–Sept 2, 2014
  6. Daily Mail–Nov 10, 2014
  7. The Wall Street Journal–Nov 9, 2014
  8. The Wall Street Journal–May 1, 2014 “German Businesses Urge Halt on Sanctions Against Russia”http://online.wsj.com/articles/SB10001424052702303948104579535983960826054
  9. The Guardian–Sept 4, 2014 “France Halts Delivery of Warship to Russia in Protest at Role in Ukraine”