Russia hit hard by falling oil price

Falling oil prices and Western sanctions are beginning to bite hard in Russia.

Speaking at an international financial and economic forum in Moscow, the country's finance minister Anton Siluanov said that the drop in oil price is costing Russia up to $100 billion (£63.7 billion) a year. Western sanctions were also said to be hitting the nation in the pocket to the tune of $40 billion, according to Mr Siluanov.

The finance minister's comments come as tension between Russia and the West intensified once again. On Saturday (November 22nd), Russia's foreign minister Sergei Lavrov said that the sanctions imposed on Russia for its roles in the Ukraine crisis was designed to force a "regime change" in the country.

President Vladimir Putin added that Russia could suffer "catastrophic consequences" from the sanctions. Speaking to official news agency TASS, Mr Putin said: "The modern world is interdependent. It's far from guaranteed that sanctions, the steep fall in oil prices and the loss of value of the national currency will lead to negative results or catastrophic consequences only for us."

There has been a gradual decline in oil price since the summer as global supply grows in abundance. This has been aided by the boom in US shale gas and a lower demand from both Europe and Asia. On Monday (November 24th), Brent crude was trading at $80.25 a barrel, a drop of 11 cents while US crude was also down ten cents at $76.41.

This fall in prices has prompted members of the Opec oil cartel to consider cutting production in order to support the current costs. The likes of Iran, Libya and Venezuela have supported a move of this ilk but Kuwait said it was unlikely to make a cut.

BP and GDF Suez recently struck oil in a new field in the UK Central North Sea. Test have been ongoing and the companies estimated that the Marconi discovery could reach a maximum rate of 5,350 barrels per day.

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