The juggling that US imperialism has to do to maintain its hegemony is becoming more bizarre by the day. First, Russia has further nailed it “in the name of the western alliance” by expanding NATO to its borders (“bear provocation”), knowing full well that Ukraine’s entry into the alliance would be totally unacceptable to Russia.
America’s aim was to prevent a rapprochement between Russia and Western Europe, which would have occurred because of the latter’s energy dependence on the former; It was even reported that, in order to fuel hostilities between Russia and Ukraine, it sabotaged an agreement between the two that had been witnessed by France and Germany.
When that confrontation eventually led to Vladimir Putin invading Ukraine, it imposed economic sanctions on Russia so it could not access its own dollar earnings from exports. But America has imposed no sanctions on imports of Russian oil and gas — except to the US, where such imports supply about 8% of total energy needs.
The reason is that up to 40% of the European Union’s (EU) energy needs are met by imports from Russia and sanctions against Russian oil would have hit European people hard, leading to a possible break-up of the “Western Alliance”. .
The failure to impose sanctions on imports of oil, of which Russia is a major producer and exporter, exporting around 5 million barrels a day, means those sanctions are becoming somewhat toothless. Is there no point in imposing sanctions with the aim of bringing a country to its knees if its main export is not banned?
Now the US is busy trying to get other oil producers to increase their production and exports so that the world can go without Russian oil. It puts pressure on Saudi Arabia to increase its production; In addition, it is also in talks with Iran and Venezuela to sell more oil on the international market.
Iran and Venezuela were the two countries against which the US continued to impose severe sanctions that have paralyzed their economies, denied them essential medicines and killed thousands of people, including children. In fact, his “sanctions regime” was first tested against those two countries before being used against Russia. Ironically, the US is approaching these very countries with an olive branch to get them to produce and export more, appropriately humiliating the bigger enemy of the moment, Russia.
Such was American hostility towards Venezuela’s “Bolivarian” regime that to this day it is attempting to overthrow the regime by promoting a pretender, Juan Guaido, in place of the president-elect, Nicholas Maduro. The US and its allies have not only recognized Guaido as President of Venezuela, they have also pressured all other countries to do the same. And yet, when it came to negotiating oil production, it wasn’t to his protégé Guaido, whose writing goes nowhere; it went to the Maduro government instead. And the Maduro government has rightly placed one condition on the US government: it must recognize the government if it sources oil from Venezuela. So imperialism is being hoisted with its own petard. Getting out of this situation will not be easy.
Sanctions of varying intensity have of course been imposed on Iran for a very long time. They were first imposed in 1979 because of the hostage crisis; In 1981, when the hostages were released, these sanctions were lifted, only to be re-imposed in 1984 and tightened in 1987 and 1995.
The United Nations imposed sanctions on Iran in 2006 over the country’s nuclear program, but these were lifted in 2016 when the Iran nuclear deal was negotiated. In 2019, however, the Donald Trump administration unilaterally withdrew from the agreement and reimposed sanctions on Iran.
After becoming president, Joe Biden announced in February 2021 that he would continue sanctions on Iran. What is particularly ironic in this regard is that the same Biden administration is now talking to Iran to isolate Russia.
Both Venezuela and Iran have suffered sanctions over lower oil exports. Iran has maintained production for some time and stockpiled the oil it could not export because reopening oil wells when they close due to production cuts is difficult and expensive. But lately, it seems that its oil production, like Venezuela’s, has also declined.
Even if Iran and Venezuela agree on US demands to increase their oil exports, two problems remain when it comes to replacing Russia as an oil supplier.
First, the amount of oil these countries can export will still not be large enough to replace Russian exports. Iran’s oil production has almost halved from pre-sanctions levels of about 4 million barrels a day, and Venezuela’s production is down from a pre-sanctions peak of 4 million, which itself was responsible for the loss, to just about 1 Million barrels per day production has fallen in this country. Resuscitating production from such reduced levels in these two countries will not be easy and will not be enough to replace Russian oil exports.
Second, and more importantly, the price at which Russian oil is being sold, at $25-$30 a barrel, is lower than any substitute oil that might be available on the world market. Therefore, even if additional oil becomes physically available, it will be much more expensive, which is why countries, especially in the EU, will be very reluctant to abandon Russian oil.
The lower price of Russian oil has even prompted India to increase its oil imports from that country. It appears that India’s daily oil imports from Russia have quadrupled in recent days to about 360,000 barrels per day. Importing oil from Russia even on this scale would therefore mean an import bill lower by at least $200 million. For any country that doesn’t take such an opportunity to cut the import bill, it would be downright stupid.
Even if it persuades some oil-producing countries to increase oil production and exports, the US can’t help but subsidize world oil prices to make them competitive with Russian prices. If it continues its efforts to replace Russian oil exports, it will have to force countries to pay more on their oil import bill, which will be all but impossible in the case of great powers like Germany and France; even others will resist such coercion.
Already there are voices in the EU that want to end the war through negotiations rather than prolong it by arming Ukraine, as the US would like to see. Recently, Italian workers at Pisa airport refused to load cargo destined for Ukraine as “humanitarian aid” when they found it contained weapons of various kinds that were secretly delivered as “aid”. This case of workers’ intervention in a key EU country is likely to find echoes in other countries if the war lasts longer.
We are a far cry from the old colonial days, when rulers made decisions that were never explained, extorted prices from the people that were never understood, and imposed their dictates on the people that were never immediately questioned.
The US today does not have the absolute hegemony that the colonial powers had. Their desperate efforts to maintain their hegemony would fail precisely because that dominance is neither absolute nor unchallenged. What we are witnessing today is a process of gradual decline in US imperialism’s hegemony around the world