Russia Getting Hit by Sanctions, Cheap Oil

Finance minister puts losses at $140 billion a year.
4:03 | 11/24/14

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Transcript for Russia Getting Hit by Sanctions, Cheap Oil
Okay. It's Monday November 24 the markets in New York are open in our big number this morning. 140. Billion dollars. Russia. Says it's expected to lose this year due to western sanctions imposed because of the conflict in Ukraine. Along with falling prices of whale this according to Russia's finance minister. When exports of energy cut off an oil slide in the pinch on President Putin. And Russia may be taking its tool hello everyone I'm Michelle Franzen and New York here with all the details Gregg Greenberg of the street. So let's break it down Greg how it was Russia getting to this 140. Billion dollar figure and should we trust it. Well the majority of that number is due to lower oil prices oil was that a hundred dollars a barrel not too long go now to 75 dollars. I think a rush is earnings around two thirds based on petrochemicals and and oil. So this is really biting more than the sanctions they prepare for the sanctions. The government put away a whole lot of money because they figured that the sanctions would bite but the lower oil prices are really hurting them it's hurting the Ruble I think the rubles or 45 to the dollar right now. It's really hurting. And could actually be more than that some experts believe sanctions are really taking it still because of financing options drying out. Well it's hard to get a good accounting of commodities because they are fungible. And that Russia did signed deals with China and Iran and is a big black market for oil so could be more could be less but we do know what's turning. And lower oil is a big factor as you mentioned with Russia supposedly getting half its revenues from oil profits is it possible that Russia would unilaterally. Cut production. I don't think they and a cut production because they need the jobs with the economy hurting due to the sanctions and due to lower oil prices the last genuine do is have Russians out of work. So they can clearly you've seen the boom in energy jobs here in America which is not helping the Russians of course. But I don't think they're gonna cut production because they need to keep people employed. Being spoon can handle the sanctions to lower oil prices are really hurting he does indeed out of work people rumbling in the street. All right so potent may not to and Russia may not lower those prices and production but OPEC cartel members which Russia is not a part of our meeting later this week how might they react. We'll OPEC has its own problems right now it's not a very unified group. You have a ran on one side and Saudi Arabia on the other some people say that Saudi Arabia even likes to lower oil prices because Iran has its own sanctions and those sanctions are pinching Iran. But right now OPEC has to worry about things like crisis and that's where that problems in Syria. Then as well as an absolute mess. So it's hard for OPEC to get together at the table and they do a lot of cheating of their own but it's an interesting nonetheless. So in that the bigger picture here is it. Is it that the sanctions are working could this mean that they might strike some sort of a deal and how is this plane on Wall Street. Well right now it wall system very well because lower oil prices and America's good for our consumers. I don't think that food is gonna give up is not the type of guy who gives up what he really wants is leverage over Western Europe there's a book out recently called the colder war. Bush talks about him winning energy domination. And he dominates energy can dominate Western Europe western Europe's having their own economic problems they're afraid of of of what Russia's doing so he does have some cards the FB Russian economy is. Is troublesome right now but he does have a sim cards and also. The Russian people of their big nationalistic so they can rally behind booed because they couldn't because the sanctions but the oil crisis heart. All right Gregg Greenberg from the street. Thanks for that perspective and for joining us. Thank you and you of course can keep up with the latest headlines right here on abcnews.com. You've been watching the big number I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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