Instrument of pressure on Russia
⇒ Warning. Any strategy does not guarantee profit on every trade. Strategy is an algorithm of actions. Any algorithm is a systematic work. Success in trading is to adhere to systematic work.
1. Introduction: The Context of Geoeconomic Pressure and the Role of Oil Prices
Geoeconomic pressure refers to the use of economic tools to achieve geopolitical goals. One of the most historically prominent tools of such pressure has been the manipulation of global oil prices. Since crude oil exports represent a major source of foreign currency revenue for Russia, a sharp drop in oil prices significantly impacts the country’s balance of payments and state budget. Western countries and their allies have repeatedly considered the possibility of artificially lowering oil prices as a method to weaken the Russian economy. For example, in March 2014, the United States unexpectedly released 5 million barrels of oil from its Strategic Petroleum Reserve—officially denying any connection with the events in Crimea, although many observers interpreted the move as a warning to the Kremlin of Washington’s readiness to strike at Russia’s economy via the oil market. In this sense, oil price volatility is not solely the result of market dynamics, but also a consequence of deliberate state actions aimed at using energy as an instrument of geoeconomic pressure.
2. Historical Precedents: The 1980s, 1998, and 2014
The 1980s (USSR period):
In the mid-1980s, a dramatic collapse in oil prices occurred—a development often viewed in Russian discourse as the result of a covert agreement between the United States and Saudi Arabia to undermine the Soviet Union. After the oil boom of the 1970s, prices began to fall sharply: in 1986, they plummeted from about $32 to $10 per barrel (with short-term lows reaching as far as $6). Saudi Arabia significantly increased oil production, oversaturating the market—a move that aligned with the Reagan administration’s objective to weaken the Soviet economy. According to estimates, the USSR lost roughly $20 billion in 1986 alone due to the oil collapse, which reduced the inflow of desperately needed foreign currency and high-tech imports by about one-third. Many analysts consider the sharp decline in oil revenues to have been a key factor contributing to the subsequent economic crisis and the eventual dissolution of the Soviet Union. From Russia’s standpoint, this episode is perceived as a geoeconomic attack that exploited the USSR’s dependence on petrodollars during the Cold War.
1998:
In the late 1990s, Russia once again became a victim of a sharp oil price crash. Global oil prices nearly halved—from $22 per barrel (WTI) in October 1997 to approximately $11 in December 1998. The trigger was the Asian financial crisis, which slashed global demand. For Russia, the consequences were catastrophic. The drop in oil export revenues triggered a sovereign default on short-term government bonds, the collapse of the stock market and banking system, and the abandonment of the ruble’s exchange rate peg (leading to a severe devaluation). The August 1998 financial crisis clearly exposed the vulnerability of the Russian economy to commodity price shocks. While the price drop was not formally part of a conspiracy against Russia (as it stemmed largely from market forces), the country once again found itself as the injured party, suffering from an external shock that undermined its financial stability.
2014:
Following the accession of Crimea and the onset of conflict in Eastern Ukraine, Russia faced a new wave of Western sanctions—coinciding with a sharp collapse in global oil prices. In mid-2014, Brent crude traded above $110 per barrel, but by the end of the year, prices plunged to around $60. The culmination of this decline came at the November 2014 OPEC meeting, where, under pressure from Saudi Arabia, the cartel refused to cut production despite market expectations—this decision sent oil prices to their lowest level in five years. As a result, Russia lost a substantial portion of its oil revenues. According to estimates by the Russian Ministry of Finance, the combined economic impact of the sanctions and the oil price collapse amounted to around 4% of GDP (roughly equally divided between the two factors). The Russian ruble experienced a currency crisis in 2014–2015 (a twofold devaluation), inflation accelerated, and Russia’s GDP contracted by 2–3% in 2015. The Russian leadership viewed the simultaneous occurrence of sanction pressure and the oil collapse as a coordinated economic attack. While analysts disagreed on the existence of a direct conspiracy between the U.S. and Saudi Arabia, the prevailing perception within Russia was that the West had taken advantage of market dynamics to deal an economic blow in response to Russia’s foreign policy actions.
3. 2022–2025: Analysis of Attempts to Undermine Russia’s Oil Revenues
The most recent and large-scale example of geoeconomic pressure on Russia through the oil sector has unfolded since 2022, in the context of the conflict in Ukraine. In response to Russia’s military operation, the United States and its allies undertook unprecedented measures explicitly aimed at reducing the Russian state budget’s oil revenues. These measures included embargoes, price caps, and efforts to increase global oil supply — all designed to deprive Moscow of financial resources.
A key measure was the introduction of a price cap on Russian oil. In December 2022, the G7 countries, the EU, and affiliated allies implemented a mechanism prohibiting companies within their jurisdictions from transporting or insuring Russian oil if it was sold above a fixed ceiling of $60 per barrel. At the same time, an EU embargo on Russian seaborne oil imports came into effect on December 5, 2022, followed by a ban on petroleum products from February 5, 2023. These actions directly targeted a reduction in Russia’s revenues used to finance military operations. In effect, the Western coalition deliberately sought to recreate a scenario similar to previous crises — sharply restricting Russia’s ability to profit even from remaining oil exports.
This strategy had a noticeable effect in 2022–2023. Russian Urals crude traded at a steep discount — by early 2023, prices had fallen below $50 per barrel at Baltic ports, significantly lower than global benchmarks. As a result, foreign currency earnings declined sharply: according to the International Energy Agency, Russia’s revenues from oil and petroleum product exports in June 2023 amounted to only $11.8 billion — nearly half the figure from a year earlier ($20.4 billion in June 2022). In the first half of 2023, Russia’s oil export revenues fell by over 35% (from $120 billion to $77 billion). Meanwhile, physical export volumes also began to decrease: Russia was forced to cut output and exports under OPEC+ agreements in an attempt to prevent oversupply and stabilize prices. By mid-2023, Russian oil exports fell to approximately 7.3 million barrels per day — the lowest level since 2021.
It is important to note that the West also employed other tools to influence oil markets during this period. The United States, aiming to prevent a global price surge due to sanctions, released record volumes from its Strategic Petroleum Reserve. In the spring of 2022, the Biden administration announced the largest oil reserve release in U.S. history — 1 million barrels per day for approximately six months (up to 180 million barrels in total). This measure pursued a dual purpose: to curb gasoline prices for American consumers and to compensate for the anticipated shortfall of Russian oil on the global market. While it was difficult to fully offset Russian supplies (sanctions were expected to remove up to 3 million barrels per day), the coordinated reserve release — joined by other oil-importing countries (IEA members) — helped create excess supply and prevented a new price rally. Thus, from 2022 to 2025, Russia faced a comprehensive package of measures: from direct bans on its oil exports to key markets to indirect pressure through oversupply and pricing restrictions.
4. Mechanisms of Pressure: Price Cap, Sanctions, Oversupply, and Western Coordination
Several complementary mechanisms of geoeconomic pressure have been deployed against the Russian oil sector:
-
Direct sanctions and embargoes. Western countries imposed bans on importing Russian oil (as the EU did in 2022) and restrictive measures targeting Russian oil companies. For instance, since 2014, firms like Rosneft have been under sanctions, hindering their access to technologies and investment. The suspension of purchases by the U.S., Canada, the UK, and others shrank Russia’s customer base, forcing Moscow to seek new markets.
-
Price cap mechanism. The $60 per barrel price ceiling on seaborne Russian crude — agreed upon by the G7 and the EU — was reinforced by a prohibition on tanker insurance and freight if the selling price exceeded the cap. This unprecedented policy tool was not aimed at reducing export volumes but rather at cutting Russia’s export earnings. When Urals crude traded below the cap (as seen in early 2023), Moscow lost revenue without a corresponding drop in physical shipments.
-
Supply manipulation (oversupply). A classic tactic — flooding the market to crash prices — was employed. Historically, this was done either by boosting production among key suppliers or releasing strategic reserves. In 1985–1986, Saudi Arabia sharply increased output after a period of restrictions, causing a global glut and driving prices down by nearly 50%. A similar dynamic occurred in 2014 when OPEC, under Saudi leadership, refused to cut output despite oversupply — driving prices lower. In 2022, it was the U.S. and other consumers that created oversupply by releasing strategic reserves. Excess supply leads to global price declines, slashing profits for exporters like Russia.
-
Allied coordination. One of the most critical factors was the unified and coordinated approach of the West and its allies. The U.S., EU, Japan, and Australia jointly imposed sanctions and price caps, minimizing loopholes. In parallel, Washington undertook diplomatic efforts to persuade Gulf oil producers to increase supply and prevent a new price rally. Although disagreements arose with OPEC+ (where Saudi Arabia and Russia cut production in late 2022 to maintain prices), the overall Western strategy remained focused on minimizing Russia’s oil revenues through collective action. Coordination was evident in the synchronized G7 reviews of the price cap every two months, ongoing debates over tightening limits, and unanimous EU decisions despite the difficulty of achieving consensus among 27 member states. This alignment denied Moscow the ability to simply reroute exports to other developed markets.
The combined use of these mechanisms created unprecedented pressure on Russia’s oil and gas revenues. Unlike previous episodes (the 1980s, 2014), where price collapses were largely market-driven or driven by individual actors, the 2022–2025 campaign became institutionalized and multilateral — combining sanctions policy with intervention in the global oil market to curtail Russia’s economic and geopolitical capabilities.
5. Consequences for the Russian Economy
A sharp decline in oil prices—especially when triggered by external pressure—has profound consequences for the Russian economy. These effects manifest across several key areas:
Budget and foreign currency reserves:
Falling oil revenues directly impact the federal budget, as a significant portion of state income traditionally comes from export duties and the mineral extraction tax on oil. In 1986, the USSR lost approximately $20 billion in oil revenue—a colossal figure at the time, equivalent to a major share of the national budget. In modern Russia, the effect has been similar: in just the first half of 2023, oil and gas revenues to the federal budget dropped by nearly 47% compared to the previous year. This led to a budget deficit and forced the government to draw from its Reserve Fund. As a result, Russia has had to revise its fiscal rule and use accumulated reserves to offset the loss of petrodollars.
Exchange rate and inflation:
Declining export earnings weaken the national currency. During periods of shock (1998, 2014, 2022), the ruble underwent sharp devaluations. For example, in August 1998, after the oil collapse and sovereign default, the ruble’s exchange rate plunged several-fold; in December 2014, the ruble lost more than 50% of its value against the dollar within weeks. The weakening of the ruble drives up domestic prices—especially for imported goods—fuelling inflation. In 2015, inflation in Russia exceeded 12–15% amid currency depreciation and the oil shock. Higher credit costs and reduced consumer purchasing power lead to a decline in domestic demand.
Economic growth and crises:
The reduction in foreign currency inflows and investment capacity negatively affects GDP dynamics. The most severe case was the 1998 crisis, when the Russian economy entered a deep recession. In 2014–2015, the combination of sanctions and low oil prices caused a GDP contraction of –2.5% in 2015 and stagnation in the following years. In 2022, early forecasts predicted a double-digit decline in GDP, though the actual contraction (~2%) was less dramatic due to emergency stabilization measures and the partial redirection of exports. Nonetheless, the trend is clear: energy price wars undermine long-term growth, increase the risk of banking and debt crises (as seen in 1998), trigger capital flight, and deteriorate the investment climate.
Social consequences:
Indirectly, blows to oil revenues affect the standard of living. Budget cuts force the government to reduce spending or tap into reserves, limiting its ability to invest in the social sector. Ruble devaluation erodes the real incomes of citizens. In the 1990s, the oil price shock worsened an already difficult socioeconomic situation, and in 2014–2015, poverty rates rose sharply. Thus, external pressure through oil prices transforms into internal economic and social challenges, weakening the country in a systemic manner.
It is important to emphasize that Russia’s economy has significantly adapted since the Soviet era. In response to past crises, the country created reserve funds, implemented a fiscal rule, and maintained relatively low public debt. These stabilizers help soften the impact, but they do not eliminate systemic vulnerabilities. Each new wave of falling oil prices once again exposes these weaknesses, necessitating urgent action to prevent financial destabilization. In the end, the consequences of oil-related pressure persist for years, shaping the trajectory of Russia’s economic development and forcing it to seek durable protection strategies.
6. Alternative Markets and Russia’s Adaptation Mechanisms
Faced with mounting external pressure, Russia was forced to adapt swiftly and decisively to mitigate damage and preserve its oil revenues. The main adaptation strategies included:
Reorientation of exports to the East.
Restrictions on access to traditional Western markets (Europe and North America) led to a historic pivot of Russian oil flows toward Asia. China and India emerged as the largest buyers of Russian oil. According to Russia’s Ministry of Energy, by 2022 the volumes lost due to the European embargo were fully redirected to “friendly” countries. India, which had barely imported any Russian oil prior to 2022, increased its imports more than 20-fold within a year. In February 2022, Indian imports stood below 100,000 barrels per day; by February 2023, they exceeded 2.1 million barrels per day. By the end of 2023, China accounted for approximately 50% of Russia’s total oil and petroleum exports, and India about 40%. This eastward shift allowed Russia to maintain production levels: in fact, Russian oil exports grew by 7.6% in 2022 compared to the previous year—albeit at the cost of significant discounts offered to Asian buyers. Thus, diversifying export routes became a key survival strategy: having lost access to the West, Moscow consolidated its presence in Asia.
Discounted sales and flexible terms.
To retain new clients, Russian companies offered crude oil at deep discounts to global benchmarks. In 2022–2023, the Urals-Brent discount reached $20–30 per barrel. Though an undesirable measure, price dumping was a necessary form of adaptation that helped preserve market share—albeit at reduced profit margins. Additionally, sellers became more flexible, offering preferential payment terms, barter deals, and swap schemes involving third countries. The term “shadow fleet” emerged—referring to dozens of tankers outside Western jurisdiction acquired specifically to transport Russian oil in circumvention of sanctions. These vessels often operate without international insurance and with disabled transponders, conducting ship-to-ship transfers at sea. This semi-informal logistics network became another layer of adaptation, enabling physical delivery of oil to end consumers while bypassing Western oversight.
Transition to national currency settlements.
Sanctions that disconnected Russian banks from SWIFT and restricted dollar/euro transactions accelerated the shift of external trade to alternative currencies. By the end of 2022, the share of yuan in Russian import settlements surged from 3% to 20%, and by 2023, the majority of oil trade between Russia and China was conducted in yuan. Similarly, settlements with India were partially carried out in Indian rupees through special Vostro accounts, though currency conversion remained challenging. Russia actively promoted the use of the ruble: the 2022 requirement to pay for gas contracts in rubles was a precedent—even though it did not directly concern oil, it demonstrated a clear drive toward de-dollarizing energy trade. In parallel, national payment systems—such as Russia’s Mir and China’s UnionPay—were increasingly used for financial transactions. A key role was also played by Russia’s SWIFT alternative—the SPFS system. As of early 2025, 177 financial institutions from 24 foreign countries had joined SPFS, enabling relatively seamless financial communication with “friendly” states. Together, these steps form the prototype of a sovereign settlement infrastructure, reducing dependence on the dollar-based system and minimizing vulnerability to financial sanctions.
Production cuts and coordination with OPEC+.
An unusual adaptation strategy involved Russia participating in output-limiting agreements in favor of higher global prices—voluntarily restricting its own production within the OPEC+ alliance. Since joining the deal in 2016, Russia has coordinated production levels with other oil exporters. Particularly in 2022–2023, as demand for Russian oil declined, Moscow and Riyadh jointly announced multiple production cuts to prevent further price declines. For example, in April 2023, both Russia and Saudi Arabia reduced exports by 500,000 barrels per day each, which helped stabilize oil prices above $80. This coordination with non-Western producers served as a countermeasure to consumer pressure: while the West aimed to crash prices, exporters tightened supply to keep prices afloat. However, this tool has its limits—cutting production inevitably reduces market share and revenues, so its use must be carefully balanced.
Increasing domestic refining.
Faced with restrictions on crude oil, Russia increased its focus on exporting refined petroleum products—such as gasoline, diesel, and fuel oil. Although refined products were also sanctioned by the EU starting in 2023, finding buyers for fuel is often easier, and part of the output can be consumed domestically to replace imports. The government announced large-scale investments in refining: according to Deputy Prime Minister Alexander Novak, about 1 trillion rubles would be invested by 2028 in upgrading and building 50 refining units. This would increase gasoline output by 4 million tons and diesel by 30 million tons per year, enabling more oil to be refined domestically rather than exported in raw form. At the same time, Russia boosted petrochemical projects—with investments of 3–3.5 trillion rubles planned by 2030 to create new capacities. The strategy is clear: move up the value chain to reduce reliance on crude exports and extract greater value per barrel produced.
This comprehensive adaptation strategy has already yielded partial results. Russia avoided a collapse in production—export volumes only began to decline moderately in the second half of 2023. The economy adapted to the discounted oil regime: ruble-denominated revenues were supported by a weaker ruble, and fiscal rules were adjusted to the new reality. Still, the cost of adaptation included revenue losses (due to discounts), growing dependence on a narrower group of buyers (chiefly China and India, whose bargaining power increased), and deeper technological and logistical entrenchment with the East. Nevertheless, these mechanisms helped Russia absorb the geoeconomic shock and develop a kind of “immunity”—at least in the short term.
7. Geopolitical Logic Behind the Pressure: Undermining or Disintegrating Russia Through Energy
The use of oil as a “weapon” against Russia is driven by a specific geopolitical rationale. From the perspective of Western strategists, targeting the energy sector serves several objectives simultaneously: to undermine the economic foundation of the Russian state, reduce its ability to finance military operations and foreign influence projects, and provoke internal socio-economic hardship that could ultimately weaken central authority.
Historically, Moscow’s dependence on hydrocarbon exports has been seen as its Achilles’ heel. During the Cold War, the U.S. actively sought leverage over the Soviet resource-based economy—and the collapse of oil prices in the 1980s was seen as a strategic opportunity to accelerate the unraveling of the Soviet system, which eventually happened. In the post-Soviet period—particularly during rising tensions in the 2000s and 2010s—the West noted that high oil and gas revenues were fueling Russia’s global ambitions. For example, in 2014, U.S. President Barack Obama stated that the Russian economy had been “torn to shreds,” in large part due to falling oil prices and sanctions—implying that this undermined Moscow’s capacity for independent policymaking. By 2022, the rhetoric had become even more explicit: Western leaders openly stated their intent to reduce the Kremlin’s “war chest” by curbing its energy windfall.
From the Russian perspective, this fits into a broader context: the West’s desire not just to weaken, but to ultimately dismember Russia as a geopolitical rival. President Vladimir Putin has repeatedly stated that Russia’s adversaries pursue a strategy of “divide and rule,” aiming to break apart historical Russia. In this view, energy pressure is one of the tools of that strategy. By depriving Moscow of export revenues, the West seeks to destabilize the economy, provoke a budget crisis, devalue the ruble—and thus lay the groundwork for internal political unrest. Ideally, this would force Russia’s leadership to make concessions or change course due to domestic discontent and lack of resources.
Moreover, the energy offensive serves a preventive strategic goal: by cutting Russia off from global markets, the West hopes to permanently reduce Moscow’s share in the energy sector, thereby diminishing its geopolitical influence. Oil and gas have traditionally empowered Russia—whether via pipelines to Europe or energy diplomacy with Asian importers. Damaging Russia’s reputation as a reliable supplier (through sanctions, tanker seizures, legal challenges) and replacing its market share with alternative sources (e.g., U.S. LNG or increased production from other exporters) simultaneously enhances Western energy security and weakens Russia’s influence over energy-dependent allies.
Thus, geoeconomic pressure through oil is based on the assumption that economic weakening leads to geopolitical weakening. If this approach contributed to the fall of the USSR, Western strategists today consider that another collapse in oil revenues could force Russia to choose: either alter its political behavior or face prolonged decline. For Russia, this logic reinforces long-standing beliefs in a deliberate strategy of economic “suffocation”—up to and including attempts at disintegration. This understanding motivates the Russian leadership to resist pressure and seek countermeasures, because what is at stake is not merely short-term gain, but the sovereignty and territorial integrity of the state.
8. Conclusion: Action Plans and Recommendations for Protecting Russia’s Economy
The experience of past decades—and particularly the events of 2022–2025—demonstrate that the deliberate manipulation of oil prices remains an effective tool of geoeconomic pressure used by Russia’s adversaries. If we view Russia as a target of this strategy, it becomes clear that safeguarding economic security requires proactive measures. Below are key strategic recommendations for protecting Russia’s economy against future external shocks:
Diversify the economy and reduce oil dependence.
The main long-term response is to gradually reduce the share of the oil and gas sector in GDP, exports, and the state budget. This requires the development of manufacturing, high-tech industries, agriculture, and services. A less oil-dependent economy will be less vulnerable to external price manipulation. The long-discussed goal of “getting off the oil needle” now becomes a matter of national resilience. Investment should prioritize sectors that generate domestic added value, to offset any decline in raw material income.
Strengthen alliances in the East and explore new markets.
As the “collective West” shuts its doors to Russian oil, it is vital to deepen partnerships with Asia, the Middle East, Africa, and Latin America. Russia must not only maintain current export levels to China and India but also expand to new regions—boosting exports to Turkey, Southeast Asia, and emerging economies. At the same time, it should enhance political and financial ties with these countries, building a coalition of states interested in continued cooperation. Nations like Iran, Venezuela, and BRICS members also face Western pressure—coordination with them, including joint efforts to influence oil markets, can help counter price dictates from major consumers. This Eastern vector should ensure stable long-term demand for Russian energy even in the face of Western boycotts.
Invest in domestic refining and infrastructure.
To increase resilience, Russia must enhance its refining capacity and develop logistics infrastructure that is independent of chokepoints. Building new refineries, upgrading existing ones (with 1 trillion rubles allocated through 2028), and expanding petrochemical industries will allow Russia to export value-added products rather than raw crude—products that are less vulnerable to price shocks. Prioritizing infrastructure projects to the East—pipeline expansions to China, new rail links to Pacific ports, and tanker fleet upgrades—is also crucial. The more flexible and regionally diversified the logistics system becomes, the harder it is for foreign actors to isolate Russia from buyers. Integrated infrastructure across Eurasia will reduce the effectiveness of embargoes.
Develop sovereign financial and settlement systems.
To shield itself from financial pressure (sanctions and the dollar system), Russia must continue strengthening its alternatives. The SPFS payment system should be expanded to as many banks in friendly nations as possible to ensure uninterrupted transactions. The use of rubles and partner currencies should be scaled up, potentially leading to the creation of joint settlement units or pegging energy prices to a BRICS currency basket. The potential of the digital ruble or joint crypto initiatives for international payments should also be explored to bypass Western-controlled financial channels. Meanwhile, foreign reserves should be shifted toward non-blockable assets (gold, yuan). The creation of independent trading platforms—for instance, expanding the St. Petersburg International Mercantile Exchange to trade oil in rubles or yuan—will help Russia move away from benchmarks set in London or New York. The goal is financial sovereignty, where foreign pressure loses effectiveness due to the inability to choke off payment systems or crash the ruble.
In conclusion, Russia—viewing itself as a target of international geoeconomic warfare—must learn from each episode of oil price manipulation. Strategic foresight dictates the need to reinforce economic foundations and flexibility proactively, not reactively. Historical precedents, from the 1980s to the present, reveal the vulnerabilities of oil export dependence—but also offer survival strategies: diversification, non-Western alliances, deeper domestic processing, and independent financial systems. By advancing these initiatives, Russia can significantly reduce the effectiveness of the “oil weapon” and safeguard its sovereignty against external coercion. It may take time and investment, but this is the only sustainable path for protecting the Russian economy amid global geoeconomic competition and commodity market turbulence.
Analysis of Oil Price Suppression as a Tool of Pressure on Russia: Historical Precedents, Geoeconomic Tactics, Adaptation, and Economic Defense Strategies. BT Futures Top, .#Russia, #oil, #oilprices, #geoeconomics, #sanctions, #energysecurity, #oilexports, #pricecap, #oilcrisis, #OPEC, #USA, #India, #China, #economicpressure, #sovereigneconomy, #energyindependence, #energywar, #financialsecurity, #geopolitics, #easternvector, #diversification, #USSR, #2025, #analysis
