It shouldn’t have been a difficult decision for the Biden administration: to push Russian President Vladimir Putin into economic oblivion, or to hedge his bets with thousands of Ukrainian lives at stake and hope that Russian fossils can regulate soaring fuel prices.
Unfortunately for those who bore the brunt of Putin’s murderous rampage, Team Biden failed to respond to the economic engine driving his ambitions before escalating into a devastating war.
The time to shut down Russia’s fossil lifeline is long gone.
After years of accounting for less than 0.5% of annual US imports of oil and refined products, Russia has steadily increased its share over the past decade, peaking at over 7% and overtaking Saudi Arabia as the third largest exporter after America.
The United States has imported about 18 million barrels of Russian oil each month, filling the gap left by sanctions on Venezuela in 2019. Russian oil is a good substitute for Venezuelan crude, and Russia is likely to undercut other potential suppliers.
This may seem insignificant at first glance. But exports of fossil and related hydrocarbons account for about 45% to 50% of Russia’s GDP. One has to ask: if Europeans, who import a significantly higher percentage of Russian hydrocarbons, can agree to serious cuts, why is America still helping to fund Russian military wars and global adventurism?
Just a few months ago it would have been relatively easy to replace Russian oil with other sources. Now the United States is playing dictator poker with countries that should never have been part of this equation.
how did we get here Several US governments have used different levels of punishment against other nations. Some are singled out for permanent disgrace, and others, guilty of far more egregious crimes against humanity, hardly get a slap in the face. Russia, a longtime purveyor of death and destruction that uses outlaw weapons to maximize pain and suffering, was in the slap club.
Venezuela, run by a man who uses oil resources to starve and torture his own countrymen, was tormented by sanctions to the maximum in 2019. Nicolás Maduro then turned to this unholy trio of Russia, China and Iran, countries to whose crimes Maduro often pales in comparison. to save his oil empire.
Then there is Iran. Sins notwithstanding – the mass murder of Syrian civilians, the destruction of Lebanon by its envoy Hezbollah, turning Yemen into a bloodbath to prove something, an incredible human rights record – Iran has always managed to work its way back into Yemen to blackmail the mercies of those foolish enough to believe Tehran’s latest story.
Team Biden is working feverishly in Vienna to strike a deal with Iran and its key enabler, Russia. It is also scrambling to put officials on the ground in Caracas to tell Maduro that all is forgiven if he leaves Russia and America goes back to selling its oil, which it will happily buy again.
A cynic may note one theme: partnering with dictators to crush an even worse dictator – without whom, coincidentally, Iran and Venezuela would have been far less powerful in the first place.
In a few days, those involved in this negotiation farce want to announce a deal with Iran in Vienna. Russia will likely be the guarantor, as Iran already has highly enriched uranium, or HEU. It’s not too far-fetched to speculate that a key component of the deal will be Russia’s commitment to ensure it holds or oversees Iran’s HEU. Negotiators could even announce a face-saving deal whereby Russia would convert this HEU into low-enriched uranium for commercial reactors.
Minimal or no US or Western role in policing this HEU is likely, just the good word and hollow promises of Russia and Iran. Not surprisingly, in another last-minute move, Russia is seeking sanctions relief and guarantees as part of the deal.
Part two of this deal is the lifting of sanctions on Iran, followed shortly thereafter by a flood of Iranian oil and gas onto the world market, which is essential for a country craving hard currencies. A basic law of economics states that the more oil there is on the market, the lower the prices; The Biden administration is betting that Iranian and Venezuelan oil will lead to less pain at the pump.
This is why Team Biden didn’t immediately take steps to stop importing Russian crude: the Iran deal and an economically dubious premise about the impact of a US shutdown on oil markets. And that’s why she answered every Ukrainian request with hand rings until the bombs fell.
Lest anyone raise the specter of climate change and the need to accelerate the transition away from fossil fuels, the in-game agreements suggest that climate change is miraculously happening only in the skies over the United States and nowhere else.
Debra Cagan is a Distinguished Fellow of the Transatlantic Leadership Network and a former State and Defense Department official.