Ruble Crushing Russia - Joe Blogs

Russia’s oil revenues are coming under increasing pressure, but a less obvious factor is now intensifying the strain on the economy: a sharply stronger ruble.

Over the past 12 months, the Russian currency has strengthened from around 98 to 77 against the US dollar. While a rising currency is often associated with economic stability, in Russia’s case it is having the opposite effect. Because most of Russia’s key exports — including oil and gas — are priced in US dollars, a stronger ruble means those dollar earnings translate into significantly fewer rubles once converted.

This has major implications for Russian companies and for the state budget. Lower ruble-denominated revenues reduce reported profits and, in turn, cut the amount of tax paid to the government. When combined with falling oil prices and heavy discounts on Russian crude, the strengthening ruble is amplifying the decline in fiscal income.

The video explains this mechanism using a simple worked example, showing how identical dollar earnings now generate more than 20% less revenue in ruble terms than they did a year ago. It then examines the broader consequences for Russia’s oil and gas receipts, the growing budget deficit, and the increasing reliance on state reserves to fund spending.

At a time of elevated military expenditure and weakening external demand, the ruble’s strength is emerging as a further structural challenge for Russia’s finances rather than a sign of economic resilience.

Chapters:
0:00 Intro
0:21 RUBLE
3:36 INFLATION
5:24 DAMAGE
9:55 SUMMARY & CONCLUSION