The collapse of the commodities market, specifically the major drops in the price of oil and natural gas, has caused an economic crisis in Russia due to their high dependence on both commodities.  Add in the falling price of the ruble and roughly 70 banks going under, Russia now faces their version of the 2008 collapse.  

While their government tries to calm investors by saying the volatility is due world economic conditions, the falling price of oil may significantly impact their ability to quickly – and independently – come out of the crisis on their own.

Last Friday, the World Bank came out and ward that Russia may need a bailout of their own.  

“If oil prices in 2009 and 2010 average $30 a barrel, that would be a nightmare scenario for a global economy,” Zeljko Bogetic, the World Bank’s chief economist in Russia told investors on Friday. “The pressures on the current account and public finances in Russia would quickly rise to a point where the financing constraint would become so sharp that it’s possible even to envisage Russia’s return from a creditor to international organizations to (that of) a borrower.” 

Translation – if oil continues to fall the Russian government will have revenue decline significantly, and as a result, the government will need to turn to the World Bank or other governments for loans in order to continue to function.

I believe this is exactly why OPEC countries decided to cut output as drastically as they did recently. Each country relies of oil revenue in order to fund government activity.  As the money dries up, so does the ability for the governments in question to provide funding for needed programs – like military spending.  

So as we look at Russia potentially turning to the world for money to survive, other countries dependent on oil revenue may not be far behind.