NEW YORK (MarketWatch) — Plummeting crude oil prices, international sanctions, the crumbling ruble and rising sovereign debt yields are creating what one analyst called the “perfect storm” for the Russian economy.

And if the price of crude oil continues to decline, it’s only a matter of time before the Russian Federation is once again facing the prospect of default. The last time the country suffered a major default was 1998.

Yields on Russia’s dollar-denominated debt continue to climb. The yield on the most-recently issued dollar-denominated 10-year Russian bond was around 6.2% Friday, the highest level since it was issued a year ago.

Meanwhile, the spread on Russia’s sovereign credit default swaps has hit its highest level since July 2009, when the global economy was still suffering from the fallout of the financial crisis.

At the same time, falling oil prices are dragging the ruble lower. The U.S. Dollar was worth 52.6236 rubles Friday, just below a record high reached earlier in the week.

It’s not a pretty picture.

“They’ve found themselves in a kind of Catch-22,” said Bryan Turley, managing director of the investment banking group MLV & Co. “Its economy is moving toward recession, while the cost of their debt, which they would need to stimulate the economy, is going up. So something has to give. Either they have to take a chance and spend their way out of it, or they’re going to have to institute austerity measures.”

Russia has been spending billions of its reserves at a time on futile attempts to buoy the ruble, which continues to break through record lows against the dollar. It spent nearly $13 billion in the first half of October alone, according to The Wall Street Journal.

As of Friday, the Central Bank of Russia had $393.6 billion in gross reserves. Meanwhile, its total outstanding debt was $642 billion, according to data from Credit Suisse. Russia has relied almost exclusively on profits from energy exports to pay down this debt. Now those profits are seriously threatened.

Oil and natural gas constituted about 68% of Russia’s exports last year, according to the U.S. Energy Information Administration.

If the price of oil continues to fall it could lead to a dramatic rise in unemployment as energy companies are forced to make drastic cutbacks. And with the U.S. and European Union having levied sanctions against several of the largest Russian energy firms, including Rosneft, Transneft, Gazprom and Novatek, Russia would need to move unilaterally to rescue its largest corporations from default — a move that would hurt the country’s creditworthiness, making it even more costly to pay down its debt, said Ruggero de’Rossi, senior portfolio manager for emerging market debt at Federative Investors.

Russian President Vladimir Putin has resorted to threatening speculators with retribution for driving the ruble lower, while Mikhail Fradkov, the head of Russia’s Foreign Intelligence Service, accused the West of deliberately manipulating the price of oil and the value of the ruble in an attempt to hurt the Russian economy.

For now, Russia’s fate is largely tied up in the price of oil.

“If oil prices continue to decline — if we get to $60, or $50, or $40 dollars a barrel — and Russia loses another $150 billion in the next year, then obviously we as investors should start to worry that Russia’s reserves will run out,” deRossi said.