Russia to lose some $50 billion a year due to Western sanctions: finance minister

MOSCOW (AFP) - Russia is set to lose around US$40 billion (S$50 billion) per year due to Western sanctions over Ukraine, Finance Minister Anton Siluanov said Monday.

"We are losing around US$40 billion per year due to geopolitical sanctions and we are losing some US$90 to US$100 billion per year due to oil prices falling 30 percent," Siluanov said in a speech at an economic forum in Moscow, quoted by RIA Novosti news agency.

Sanctions imposed by the European Union and the United States on Russia’s economy, which is largely dependent on exports of raw materials, block its access to international capital markets and also to technology. 

Russia’s Foreign Minister Sergei Lavrov on Saturday accused the West of attempting to achieve “regime change” in Russia through sanctions that aim to destroy the economy and rouse public protests. President Vladimir Putin suggested Sunday that Russia could experience “catastrophic consequences” from sanctions, the falling oil price and the plunging ruble, while arguing that these would have knock-on effects for other countries.

“The modern world is interdependent. It’s far from guaranteed that sanctions, the steep fall in oil prices and the loss of value of the national currency will lead to negative results or catastrophic consequences only for us,” Putin warned in an interview with TASS news agency.

Putin denied he has financial links to the Russian officials and businessmen from his inner circle who are targeted by Western sanctions blacklists. He said to impose sanctions on those individuals in an attempt to get to him was an approach based on a “false premise.” Putin suggested that falling oil prices were due to “targeted steps by our partners on the world energy market.”

Energy minister Alexander Novak said Friday that Russia was considering cutting its oil production in a bid to revive prices, as the falling price of crude along with sanctions over Ukraine have led to the ruble plunging in value. A major producer of crude oil, Russia is not a member of the OPEC oil producers cartel, which is to discuss later in the week whether to cut output. 

Russia gets around half of its revenues from oil profits. Its budget for next year, passed by the lower house of parliament on Friday, is based on an oil price of US$96 per barrel.