Russia Reform Monitor No. 2374

Related Categories: Democracy and Governance; Energy Security; International Economics and Trade; Resource Security; Middle East; Russia; Latin America; West Africa

New tensions in the "OPEC+" alliance - as the expanded makeup of the Organization of Petroleum Exporting Countries is known - is having a major effect on Russia's economic health. For the first time since 2014, the value of the Russian ruble has plummeted, falling nearly 10% to land at 75 to the U.S. dollar. The cause for the drop was Saudi Arabia's decision to increase its level of oil production (something Moscow opposed), thereby resulting in a 30% drop in the per-barrel value of crude on the global market. Following the Saudi decision, oil fell in price to $31.02 a barrel, before rising to stabilize at $34.

The Saudi move has had a dramatic impact on Russia, which is deeply dependent on oil sales to fund its budget and assorted programs, such as the country's National Welfare Fund. The Russian oil industry's break-even point is $50 per barrel - far higher than the current world per-unit price. In order to make up the difference, Russia will eventually need to tap into its $570 billion in foreign currency reserves. However, the Russian Ministry of Finance is confident that, if need be, those reserves can weather 6-10 years of oil revenue in the $25-30 range per barrel. (The Moscow Times, March 9, 2020)

TNK Trading International, a subsidiary of Russian oil giant ROSNEFT, has been sanctioned by the Trump administration for helping Venezuelan strongman Nicolas Maduro maintain his grip on power among ongoing economic turmoil and political strife in the South American nation. Venezuela's oil exports have fallen by a third since opposition politician Juan Guaido asserted his legal claim to the country's presidency back in 2018. TNK had been acting as an international intermediary for the Maduro regime, allowing Caracas to skirt U.S. sanctions by transporting and selling Venezuelan oil in Asia. Maduro, in turn, has for years used his country's oil supply to repay Russian loans and credit. Rosneft Trading SA, a separate subsidiary of the parent company, has been sanctioned for similar activities in the past. Both Maduro and ROSNEFT have refuted the charges, insisting that they are in compliance with international law and sanctions. (Reuters, March 12 2020)

Each of Russia's 24 richest billionaires have seen their net worth decline since the start of 2020 as a result of coronavirus-related economic disruption and oil price volatility. Collectively, the group has lost $62 billion dollars, $15 billion of which was lost on March 12th alone. Natural gas tycoon Leonid Mikhelson lost as much as $10 billion of his $25 billion fortune, while businessman Sergei Popov fared comparatively well, losing just $3 million of his $4 billion in funds. However, the group as a whole still controls $239 billion, and Russia's richest person, Vladimir Potanin, is now worth $24 billion after having lost $3.5 billion since the start of the year. (The Moscow Times, March 13, 2020)

A Russian troll operation based out of Ghana and Nigeria has been remotely stirring up racial tensions in the United States ahead of the 2020 presidential election, a CNN investigation has uncovered. The operation was headquartered in a safehouse in Accra, Ghana, that had been officially rented by an NGO named Eliminating Barriers for the Liberation of Africa, or EBLA. Its products, found on sites such as Facebook, Instagram, and Twitter, associated itself with the Black Lives Matter movement in the U.S., discussing racism and police brutality. EBLA's employees at the Accra location were Ghanaian locals, who were told to masquerade as individuals in states such as New York, California, Florida, and Indiana, and to conduct their work in the evening and at night in order to correspond with waking hours in the United States.

The group covered topics similar to those previously tackled by the St. Petersburg-based Internet Research Agency, which has been implicated in Russian interference during the 2016 election. In recent months, Facebook and Instagram began removing pages associated with EBLA. 13,000 Facebook and 260,000 Instagram users have been found to have followed one or more of the bogus pages. One EBLA image was even retweeted 126,000 times before being identified. The Accra office was shut down on February 6th by Ghanaian security services, but intelligence experts expect more such operations to be uncovered in the future. (CNN, March 13, 2020)