Russia’s worst nightmare closes in

Russia over past few years has been facing tough challenges over its economy and currency. Last year, Ruble has depreciated from just 35 to 80 per dollar. Central bank had to push interest rates as high as 17.5%.

Currency situation has stabilized since then with Ruble now trading at 49.8 against dollar.

Russian economy remains burdened with western sanctions, which prevents its economy from accessing the world market freely. Asset freezes has taken place for many Russian industrialists, especially the ones who are close to Russian President Vladimir Putin.

Ukraine, which has been closely linked to Russian federation for many years, now might choose to ally with westerners.

To add to the woe, energy prices namely crude which has been Russia's top export, dropped sharply since May last year. Crude price is down almost 40%, adding pressure to Russia's state and defense budget.

However, worst for the Russian economy is yet to come as its worst nightmare closes in.

In one word, its hydraulic fracturing, which has shot energy production in US, making it to consider entering the energy market as net exporter.

• This Tuesday, bipartisan members have introduced legislation in Congress to scrap decade old policy ban to crude oil exports by US. There is still some time and work left before it passes through congress and house, however it can be approved sooner than expected. Probably after next US election.

If the legislation passes through congress, risks run high that Russia might lose its market share especially in Europe and finally ending its geo-political influence.

Such a circumstance will most likely lead to another rout in Ruble and Russia's stock and bond market. Gazprom will be single largest loser.