The West knows Vladimir Putin as a cold, calculating strategist, but in the run-up to this spring’s presidential elections, he has been putting on a different persona. Over the past few weeks, he’s made a number of generous promises, from increased salaries for public employees to cheaper healthcare. As a result, his once iffy poll numbers have been steadily rising. Most pollsters now estimate that Putin would avoid a runoff if the election were held today.
The rising price of oil lies just behind these promises. Rising energy prices may be political poison for American politicians, but it’s just the reverse in Russia, filling state coffers and funding new rounds of government giveaways to keep a restless population happy. The FT estimates that Putin needs oil to be at least $80 a barrel to keep this system functioning smoothly. Fortunately for Putin, oil prices are currently around $120 per barrel, and may go even higher due to the situation with Iran.
Besides relieving pressures for democratic change, high oil prices have another effect as well: Russian foreign policy gets a lot tougher.
This is a great example of the resource curse at work.