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Vladimir Putin’s presidency and the rise in world oil prices– coincidence or not?


Vladimir Putin came to world attention when he was selected by Boris Yeltsin to be his prime minister in August 1999. At that time, Russia’s economy had cratered– the GDP had fallen 40% since the USSR became Russia ten years earlier. Putin was a relative unknown to his own countrymen– just 2% of Russians wanted him to become president at the next election. Elections for president were due to be held in June 2000.

In our last post on this subject, we discussed the Russian apartment bombings, which the Russian government blamed on Chechen terrorists. Shortly after the terror bombings, the Russian military started an air campaign against Chechnya and Russian troops crossed the border into Chechnya.

Putin’s popularity rose meteorically until, by December 1999, he had the support of 55 percent of the Russian public. Yeltsin resigned the president as of December 31, making Putin acting president and pushing forward the elections from June to March 2000. Putin also received heavy monetary support from Russian business interests. With this support, and as the incumbent, Putin won the elections with 53 percent of the vote.

After Putin became president, the world price of crude oil began to rise. For the past ten years, OPEC’s crude oil price had been relatively stable: in 1990, it was $22.26, and in 1999, it was $17.44, up from $12.28 in 1998. Russia’s economy was and still is heavily dependent on the price of oil.

In 2000, the OPEC price was $27.60, before dropping to $23.12 in 2001. Over the next eight years, the price went up every year until it was $94.10 in 2008. In 2009, the price dropped to $60.86, before rising again to peak at $109.45 in 2012. The price dove for four years, bottoming out at $40.76 in 2016.

The price of oil is dependent on many factors, rising with economic expansion and falling with recessions. Other factors include political issues, especially Arab-Israeli conflict, and anything else that affects demand and supply.

Coincidental to the rise of Vladimir Putin to presidential power in March 2000, the political situation in the Middle East became much more unstable. In 2000, the Israelis and Palestinians came close to a peace treaty which might have settled a war which began with the establishment of the Israeli state in 1948.

Open warfare in Israel, Egypt, Jordan, Lebanon, Syria, and the surrounding countries coincided with dramatic jumps in oil prices. The most famous of these was the oil embargo of 1973, when the price of crude oil increased from $2.70 a barrel to $11.

A similar rise from roughly $12 in 1978 to $35 in 1980 was associated with renewed conflict despite the September 1978 Camp David accords between Egypt’s Sadat and Israel’s Begin. Peace talks and stabilization coincided until the price of crude oil fell to roughly $12 a barrel in 1998.

In 1999, President Clinton of the US began to sponsor peace talks between Arafat of Palestine and Barak of Israel, culminating in talks at Camp David in the US. These talks collapsed on July 25 2000; Clinton blamed Arafat for this failure (others blamed the Israelis or the Americans.) The collapse was followed by the “second Intifada (uprising)” in which the Palestinians openly fought the Israelis until late 2005.

The talks had included an offer by the Israelis to give the Palestinians control of a small part of Jerusalem; Arafat’s refusal of this offer and failure to make a counter-offer led to the collapse of negotiations.

Since that time, Israeli negotiators have not made an offer that included even a part of Jerusalem to the Palestinians. Some would say that Arafat’s failure to continue negotiations with the basis of accepting a small part of Jerusalem was a strategic disaster. The question is why Arafat walked away from this opportunity.

The aftermath of this interruption in negotiations was the persistent rise in oil prices to over a hundred dollars a barrel. Perhaps it was a coincidence, but the effect on Russia’s economy was highly stimulatory.

We know that the US supported the Israelis and the USSR supported the Palestinians. We know that oil prices stabilized or dropped after the Oslo accords, first in 1993 and then in 1995. We know that the Russians began to actively support anti-Israeli guerillas and to directly support Hamas in Lebanon in 2005.

The death of Yassir Arafat in November 2004 only adds more confusion to this picture. Arafat died after a sudden onset of symptoms of gastroenteritis: vomiting and diarrhea. He had improved after the initial illness but then developed low levels of blood platelets– a condition consistent either with cirrhosis of the liver or poisoning with a radioactive element such as polonium.

Eight years later, an allegation was made that Arafat had been poisoned with polonium, and that the culprit was Israel. This allegation was never established one way or the other, even after he had been exhumed and his body examined. Of course, searching for polonium (which has a half-life of 138 days) after a delay of eight years would be difficult at best. As we mentioned in our last post, a Russian agent, Alexander Litvinenko, was poisoned by the Russians with polonium in 2006. Furthermore, a Russian dissident, Alexei Navalny, was poisoned with polonium by the Russian government this year, but survived.

We cannot conclude anything with certainty, but we can say that it was quite convenient for Vladimir Putin that the price of oil rose dramatically after he became president of Russia– helping the Russian economy. There is also the faint possibility that Russia had something to do with the death of the Palestinian Yassir Arafat in 2004– causing the price of oil to go up further.

Is that too far-fetched? Probably. But maybe not. It’s certainly a welcome distraction from the fact that over 300,000 Americans have died of COVID-19 in the last ten months and that another 150,000 are likely to die in the next few months. The virus is the number one cause of death now– but let’s talk about election fraud instead.

Next time: a new mutation of the novel coronavirus has been identified in over a thousand cases in England recently.

(photo by omni matryx via

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