Falling oil prices hit Russia much harder than Western sanctions

By Michael Birnbaum, December 2, 2014

MOSCOW — Plummeting oil prices are doing to the Kremlin what sanctions could not: forcing a grim rethinking of Russia’s economic future.

Nine months into the worst relations between the West and Russia since the Cold War, the plunging price of oil is causing deeper and swifter pain than the Western sanctions that have targeted key areas of Russia’s economy. Russian leaders said Tuesday for the first time that their economy will head into recession next year. In a nation where oil and gas exports largely determine the bottom line, lawmakers are slashing spending promises. And the ruble is hitting historic lows every day.

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