The outcome of Russia’s election on Sunday (17 March) was inevitable, but democracy was not its purpose. The point was to remind the Russian people and the wider world that Vladimir Putin can decide how many votes he gets. That power is now being consolidated. His war in Ukraine may be taking longer than expected, but it has not bankrupted his country. In fact, there is growing evidence that Russia is covering up how well its oil-based economy is running.
Russia’s current account, meaning the balance of its exports against it imports, achieved a record surplus of $238bn in 2022. (The UK ran a current account deficit of £78.3bn in the same year.) By far the largest of Russia’s exports – around two-thirds of the goods that leave the country – is fossil fuels, mainly oil. The size of Russia’s surplus is closely correlated to the price of its biggest component, crude oil. When Urals crude rises in price, Russia’s current account swells. Plot the two figures on a graph, and the lines clearly track one another up and down.
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