When the prices of oil and gas spiral upward or downward, the effects are felt around the world. Economies of some countries are affected more than the others, especially, if they are large oil-exporting and -importing countries. Four of the five largest oil-importing nations, China, Japan, India, and South Korea, are in Asia and collectively import more than 15 million B/D of oil, according to the CIA World Factbook 2013–14. Any shift in oil price results in huge adjustments to these countries’ national budgets. The world’s largest oil-exporting nations include Saudi Arabia, Russia, Iraq, Iran, and Nigeria. Collectively, these nations have the capacity to dominate the global oil economy.
Let us take a closer look at the impact of changing oil and gas prices on Russia, one of the largest oil- and gas-exporting nations, and China, one of the largest oil- and gas-importing nations in the world.
Russia: Oil and Gas Exporter
Russia tops the chart as the largest country in the world by area, encompassing 6.6 million sq miles. It leads the political scene as one of the most powerful and developed countries in the world and maintains its innovative edge as a leader in nuclear power and space research. For a country with so much independent power, Russia’s economy remains hugely dependent upon the energy and mineral resources that it holds.
Blessed with abundant resources, Russia exerts huge geopolitical influence on its European neighbors. Of paramount importance to countries such as Ukraine, Russia supplies 25%–30% of natural gas needs in Europe, according to the International Monetary Fund (IMF). Oil and gas fund about half of the Russian budget, reports CNN. So what happens when commodities prices fluctuate—either up or down?