What if Russia runs out of own oil resources?

Abstract

For more than half a century the growing dependence of Russia on crude oil production and exports, thus exhausting its national oil resources, has been observed. The country can get caught up in the staples trap — running out of own oil resources, with neither money to finance imports nor national importsubstituting production. So in the coming 25 years Russia is challenged to seek a proper solution, given that oil production will be declining. What is more, Russia will have to address the challenge under pretty tough circumstances, including turbulent oil prices, the burden of economic sanctions and reduction in the volume of employment. Will Russia, as a result, face just another transformation crisis similar to the bitter experience of 1990s? What alternative sources of energy can be found to replace oil? The author is searching for the way to get out of the staples trap and presents an optimistic scenario. Being one of the top oil-producing countries, Russia will be the first to face the depletion of national oil resources, so its experience in elaborating viable ways to overcome oil dependence may be instructive to other oil-producers and contribute to the general theory of economic growth.