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Of all the countries exporting oil, Russia seems to be suffering the most serious consequences from the precipitous drop in oil prices. The Russian stock market has collapsed and the ruble, devalued eight times in recent months, has lost 20 percent of its value vs. the US dollar since August. Although Moscow managed to accumulate a substantial reserve during the good years, this is being rapidly dissipated bailing out troubled industries and $100 billion in foreign obligations are coming due next year. Worldwide demand for Russia’s minerals is dropping and unemployment is increasing.

The country is bracing for civil unrest as more workers are not being paid or are losing jobs. The unspoken social contract between government and the Russian people, in which the people ceded some political freedoms in return for prosperity and consumer goods, is breaking down.

The annual dispute over how much cash-short Ukraine will pay for past and current deliveries of Russian natural gas is in full swing. Russia supplies about one-fourth of Europe’s natural gas through the Ukrainian pipeline system. In 2006, when Moscow tried to pressure Ukraine by reducing the gas feeding into Ukraine’s pipelines, shortages developed in Western Europe. Moscow already is warning the EU that this situation could occur again.

Early next year Moscow will begin shipping LNG from Sakhalin Island and thus increase the share of LNG in the world’s gas supply. Last week Moscow hosted a meeting of the Gas Exporting Countries Forum that formalized the organization by adopting a charter and agreeing to set up a headquarters in Doha and hire a secretary general. Most members of the Forum deny any intention of becoming an OPEC-like cartel to control world LNG prices, but others are suspicious since OPEC too had innocuous beginnings.

Despite economic problems that may or may not turn out to be worse than those of other countries, Moscow continues to maneuver.