You can see Putin in 2014 in the 3rd video below warning the world's economy would collapse if oil stayed below $80 a barrel. According to Gundlach: "I hope it does not go to $40 because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be - to put it bluntly - terrifying."
The problem is the collapse in the price of crude oil on international markets. Russia has failed since the fall of the Soviet Union to diversify its economy away from hydrocarbon production. In fact, its economy is now less diversified than it was during the U.S.S.R. The consequences of this failure are now coming to the forefront.
It is highly likely that the price of crude oil will continue to fall, possibly into the $20 area, and stay there for a very long time, without any catalyst to send the price of oil back higher. There is just too much supply on the market and there is no end in sight to the deluge of crude. Iran is coming online with more production in the coming months to years. Demand is stalling in the United States and China. American shale oil has injected a different type of price control on the oil market as shuttered fracking wells can be turned back on at a moments notice without all the cost and time other types of wells require. The effect of this phenomenon is that downward pressure on crude is here to stay.
The next step to prevent Russian social unrest could be additional military steps internationally. The axis of Iran, Russia, and Syria in the Middle East is an extremely interesting new development. As Russian military power and influence grows in the region, all bets are off the table as to how this power could be used. Could Russia acquire different oil production regions in the Middle East militarily? Could they stir the fires of conquest in an attempt to spike the price of crude?
The one thing the world should have learned over the last decade about Mr. Putin is that he is unpredictable and not afraid to use military force when he thinks itís necessary for Russia (and the men who run it) and he can win. The West is feckless against Russian aggression with no leadership whatsoever. Putin must know a new American president will be much stronger and will embark on a program to rebuild American geopolitical power. Russia therefore has twelve months to get what it wants to protect the Kremlinís hold on power domestically. These are dangerous times indeed.
The November 2015 story from The Street attempted to 'laugh off' warnings of oil stuck below $80 a barrel. When reading their warning excerpted below, keep in mind that oil is now at $33 a barrel and, according to some experts, is heading towards $20. Are we about to lose several sovereign nations to bankruptcy?
As usual, their predictions are laughable. For the rest of the decade, they do not see oil prices rising above $80 a barrel. In their low-price oil scenario, they don't see oil prices rising above $80 until 2020.
They ought to predict a global economic meltdown to go along with it. The consequences of that kind of extended low oil price that the IEA predicts would not only bankrupt every oil company in the world, but also several sovereign nations.You could almost guarantee a global depression as a result.