The price of oil on the futures market of the New York Mercantile Exchange, which usually serves as an indicator of international oil prices, has been revisiting all-time highs above $43 per barrel since the beginning of this month. The rise has been caused by concern that the Russian oil giant Yukos Oil might be forced to halt production, in addition to continued instability in Iraq, a labor dispute in Nigeria's oil industry and political instability in Venezuela.
Under the administration of President Vladimir Putin, now in his second term, Russia has achieved steady economic growth that is effectively backed by high crude oil prices. But the administration is reported to have been taking steps that could drive Yukos, which has played a significant role in the new Russian economy, to the verge of bankruptcy. It is indeed a strange predicament.
At the end of last year, tax authorities in Russia accused Yukos of evading huge amounts of taxes. They ordered the company to pay back taxes for fiscal 2001 and fiscal 2002 totaling 197.3 billion rubles (about $6.7 billion). To make matters worse, the court approved a complete freeze on the assets of Yukos, including its production subsidiary.