The European Union Monday extended economic sanctions against Russia until the end of July 2016 after the deadline for raising objections passed without any member state challenging the decision. The Council of the European Union said in a statement on its website Monday that sanctions were supposed to come to an end on Jan. 31, 2016, but they were prolonged until July 31, 2016. Sanctions were introduced initially for a year on July 31, 2014, following Russia's seizure of Ukraine's Crimea region.

Some diplomats in Brussels said this might be the last time punitive measures on Russia's financial, energy and defense sectors get rolled over in their entirety. The council added that the sanctions would affect, among a host of measures, five major state-owned Russian banks, three major Russian energy companies and three major Russian defense companies.

France and some other EU nations have sought to re-engage with Moscow on countering terrorism and seeking an end to the war in Syria. Others say there can be no rapprochement until the conditions of the Minsk cease-fire deal for Ukraine have been met.

On the other hand, European sanctions are not the only problem of the troubled economy. Russia also suffers from a $90 billion-debt due to falling oil prices. After oil prices hit the lowest level in seven years last week, Russian Finance Minister Anton Siluanov said his country faces a debt of around $90 billion to $100 billion. However, Siluanov spoke early, as oil prices hit an 11-year-low yesterday, placing more burdens on the sanction-hit country.

The decline in oil prices is pressuring producers in oil-rich countries including Russia, Venezuela, Iraq, Iran, Saudi Arabia, Nigeria, the United States and Canada, and their governments are facing budget deficits. The production cost of a barrel of crude oil was around $40 to $50 in Russia, while it was $55 to $60 in the U.S., $70 to $80 in Canada, $60 to $70 in Venezuela, $25 to $30 in Nigeria and around $20 to $30 in Middle Eastern countries such as Iraq, Iran and Saudi Arabia.

Siluanov announced that they are planning to use an estimated price per barrel at around $50 for the 2016 budget, yet there may be times when the prices fall to at or below the $30 level. Russia anticipates revenue of $204 billion and an expenditure of $238 billion in their budget, and is likely to use approximately around $31 billion from reserve funds. A $1 decrease in oil prices means a drop of $2 billion in Russia's revenues.

Moreover, the fragile Russian economy has caused the flight of world giants. Eight global conglomerates have pulled out of the country within the last four months including Japanese firm Toshiba, two brands of General Motors, Opel and Chevrolet, South Korean automobile manufacturer SsangYong and German Deutsche Bank.