Earlier this year, when Russian President Vladimir Putin was racking up an impressive run of geopolitical victories, the conventional wisdom among American pundits was that the president was a shrewd and calculating strategist, outwitting his Western rivals at every turn. This view was always flawed. Putin’s biggest political victory, the now seemingly irreversible seizure of Crimea, was made possible by the chaos following the overthrow of Ukraine’s pro-Russian government, which should be counted as a much more significant defeat.

Now that the ruble has gone into a free fall, losing 22 percent of its value against the dollar this month and 11 percent Monday alone despite the government hiking interest rates, a number of commentators are pointing out that Putin isn’t looking so smart today.

Russia now expects a recession and 10 percent inflation this year, and the country’s deputy prime minister said Tuesday that poverty will “inevitably rise” as a result. Putin’s gamble, that Russia could weather the impact of Western sanctions resulting from its military incursions into Ukraine, now doesn’t appear very shrewd. “Talk of a new cold war, comparisons between Putin’s Russia and the USSR, look a bit silly now, don’t they?” writes the New York Times’ Paul Krugman.

But just as Putin’s strategic acumen was overestimated before, there’s a danger of underestimating it now. Putin’s foreign policy strength has never been has ability to look three steps ahead like some sort of geopolitical chessmaster. It’s been his ruthlessness in moving quickly to take advantage of opportunities when they present themselves: snatching a territorial consolation prize from the jaws of defeat in Ukraine, swooping in to negotiate a deal over Syria’s chemical weapons when the Obama administration was looking for any excuse not to launch airstrikes, and taking full propaganda advantage of Edward Snowden when he literally appeared on Russia’s doorstep. It’s unlikely that Putin anticipated any of these situations, but he did a great job playing the cards he was dealt.

This time, Putin’s luck ran out. The fundamentals of the Russian economy weren’t strong to begin with and Western sanctions were always going to pose a challenge. But even the almighty Putin couldn’t have anticipated that all of this would coincide with a 40 percent drop in the price of oil, which, along with gas, the Russian government depends on for about half of its budget.

But Putin has survived crises before. So far, the economic crisis hasn’t put too much of a dent in the president’s popularity. His recent annual televised address to the national assembly was heavy on the nationalist themes that have served him well throughout the Ukraine crisis and placed blame for inflation vaguely on “speculators.” With Russia’s state-controlled media taking it as a given that low oil prices are the result of a U.S.-Saudi plot to weaken Russia and Iran, it remains to be seen whether Russians will blame the government for the economic turmoil ahead.

Now that international sanctions—with a big assist from the oil markets—are having the desired effect, Western governments may be hoping that Russia will become more compliant, particularly in Ukraine, which just had its first night without a shooting in months.

This may not be the case. Putin can’t do much of anything about oil prices,and any steps to cooperate with NATO to secure sanctions relief will make him look weak. There’s a fair chance, then, that he may actually escalate tensions to get back the rally-round-the-flag effect that has sustained his popularity through the Ukraine crisis. Russian jets continue to buzz the airspace of NATO countries, and the military recently carried out snap drills in Russia’s westernmost region, Kaliningrad. This doesn’t look like a leader on the verge of de-escalating.