WHY DID BOND YIELDS CLIMB AFTER RUSSIA SEIZED THE CRIMEA PENNISULA

Russia has 80 billion barrels of oil in its reserves and exports 10 million barrels of oil a day Bond yields climbed after Russia seized the Crimea peninsula in Ukraine in 2014 The conflict led to Western sanctions against Russia and a collapse in the price of oil The resulting economic crisis sent Russian bond yields up to 11 5% Russia turned to China and other Asian countries for financing WHY DID RUSSIA BECOME AN OIL EXPORTER? Russia has the third largest proven oil reserves in the world and is the second largest oil exporter A series of discoveries in the 1960s and 1970s in Western Siberia made Russia an oil producer However, Soviet planners and engineers did not build a pipeline to export the oil and gas In the 1980s, they did not have the technology to develop new fields The Soviet Union ended its oil exports in 1991 Former Soviet oil fields began exporting oil and gas again after the collapse of the Soviet Union Russia became an oil exporter in 2004 Russia exports almost all of its oil and gas It supplies about 10% of the world’s oil and about 30% of the world’s natural gas Russia has developed a pipeline system to export oil and gas to Western Europe, Asia, and other parts of the world Russia’s oil exports have grown Oil exports reached a record of 10 53 million barrels per day in October 2018 Russia’s natural gas exports have been relatively flat WHY DID RUSSIA BECOME AN OIL IMPORTER? Oil production in Russia has fallen since the collapse of the Soviet Union Russia produced 10 63 million barrels per day in 2015 Russia’s oil exports fell to 5 13 million barrels per day in 2015 Russia’s oil production fell because of the collapse of Soviet oil fields and lack of investment in new fields Russia has increased its oil production since 2015 Oil production has climbed to 10 86 million barrels per day in 2018 Russia’s natural gas production has fallen more quickly than oil production The Soviet Union used to export natural gas It became an importer in 2008 WHY HAS RUSSIA INCREASE