New car sales in Russia may fall between 2.8 percent and 6.5 percent according to a deputy industry minister – due to a weaker rouble and falling oil prices, Reuters reports.
The announcement comes after the Russian currency snapped a six-day losing streak – and the MICEX index of Russian stocks fell more than 2.5 percent last week.
From January, the national currency has been restricted to about 10 per cent after the Russian central bank hiked rates and intervened to support the rouble.
But the situation is tense, after 93 percent of Crimean voters have backed joining Russia on Sunday – a referendum seen unconstitutional by the US and the European Union.
Already the US and the European Union announced sanctions against Russian officials – including top advisers to President Vladimir Putin, for their support of Crimea’s vote to secede from Ukraine.
But considering that Russia’s main “weapon” against Europe is gas and oil exports, the US plans to release oil from the SPR – (US Strategic Petroleum Reserve) . The SPR now holds 694m barrels of crude – and releasing these stocks would pull down oil prices. Such a move could have a speedy impact on Russia.
Financial times reports that if the US is willing to do this – the world oil price would drop $10-$12 per barrel. But even if this means only a 10 percent drop – Russia will lose about $40bn.
But three’s an if – the reaction of Saudi Arabia – the world’s largest oil exporter.