Oil Sanctions Against Russia Are a Must
March 23, 2022
https://cepa.org/oil-sanctions-against-russia-are-a-must/
Sometimes sanctions hurt the West as well as the targeted regime, but that cannot be a reason to hesitate.
Short of direct military involvement, oil sanctions represent the single most important policy instrument available to the West to sway Russian President Vladimir Putin’s political calculus. They are a tool that needs to be wielded resolutely.
Last year, Russia's total exports reached $489.8bn. Of that, energy (in the form of crude oil, pipeline natural gas, and liquified natural gas) accounted for roughly half, nearly $241bn, with the lion’s share generated by the sale of oil. Last year's average price of oil was $68 per barrel, and with the price of oil soaring (benchmark Brent crude was about $115 a barrel on March 22), it is providing the Kremlin far greater funds to fuel its aggression in Ukraine.
To be sure, the sanctions invoked so far on the Russian financial system, oligarchs, and certain industries will cause serious harm to the economy in the long run. They will also have an immediate effect on the wealth of oligarchs and the living standards of ordinary citizens. However, they will not deliver a fatal blow to the Putin regime as long as oil revenues flow into Russia. That’s because these funds oil Putin’s machine; they keep his security apparatus operating, and allow him to provide at least basic services to Russian citizens, thereby keeping their level of discontent low.
Based on this realization, the Biden administration on March 8 announced that it was banning the import of Russian oil, natural gas, and coal. So far, however, Europe has not followed suit.
Critics on the continent have opposed energy sanctions on the grounds that they would do serious economic damage given the reliance of many countries on Russian fuels. Indeed, Europe’s dependency on Russian energy has been a topic of perennial concern in recent years – but little concrete action. Germany is the largest importer, by product value, of Russian oil within the European Union. In 2021, the total EU energy import value from Russia stood at some $150bn, of which $104bn was for oil products. Germany was the largest importer at an estimated $23.6bn worth of crude oil, gasoline, and diesel.
As a result, European nations would undoubtedly feel the pinch if they went ahead with energy sanctions against Russia. As German Chancellor Olaf Scholtz said on March 7, Russian energy imports had to continue for now because oil and gas “cannot be secured in any other way.”
It is true that sanctions would hit Europe hard — EU states rely on Russia for 40% of energy supplies. Any such discomfort, however, needs to be balanced against new global realities — and the likely long-term economic and geopolitical costs if the current war in Ukraine continues.
Here, it’s necessary to clarify the nature of the energy business, and oil in particular. Oil is a global commodity, which means that there is a global oil market where prices are determined by supply and demand. In this regard, oil is different from natural gas, which is more a regional commodity and is characterized by price fluctuations in different markets.
As a result, a blanket Western ban on Russian oil won’t serve to take Russian oil off the streets — the Kremlin will simply sell to other consumers (like China.). But a joint U.S.-European ban would significantly constrict the potential buyers, while market forces will do the rest — with alternate clients negotiating cut-rate prices, knowing that the Kremlin has precious few options. The result will be a drastic slump in Russian oil income.
Such a move will admittedly not be cost-free for Europe. In the short term, the continent is likely to experience price hikes and commodity shortages. But equilibrium will be restored in time – and in a manner that disadvantages Russia.
Most of all, European leaders need to understand that the long-term costs of inaction are liable to be measured in both economic pain and humanitarian suffering, as oil revenue continues to fuel Putin’s war machine. Officials in Brussels have the ability to alter this equation, if they have the political will to do so.
Mamuka Tsereteli is Senior Fellow for Eurasia at the American Foreign Policy Council in Washington, DC.
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ASIA Spotlight with Prof. S. Frederick Starr on Unveiling Central Asia's Hidden Legacy
On December 19th, 2023, at 7:30 PM IST, ASIA Spotlight Session has invited the renowned Prof. S Fredrick Starr, who elaborated on his acclaimed book, "The Lost Enlightenment: Central Asia's Golden Age from the Arab Conquest to Tamerlane." Moderated by Prof. Amogh Rai, Research Director at ASIA, the discussion unveiled the fascinating, yet lesser-known narrative of Central Asia's medieval enlightenment.
The book sheds light on the remarkable minds from the Persianate and Turkic peoples, spanning from Kazakhstan to Xinjiang, China. "Lost Enlightenment" narrates how, between 800 and 1200, Central Asia pioneered global trade, economic development, urban sophistication, artistic refinement, and, most importantly, knowledge advancement across various fields. Explore the captivating journey that built a bridge to the modern world.
To know watch the full conversation: #centralasia #goldenage #arabconquest #tamerlane #medievalenlightment #turkish #economicdevelopment #globaltrade
Click here to watch on YouTube or scroll down to watch the full panel discussion.
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Some Lessons for Putin from Ancient Rome
Vladimir Putin, having sidelined or destroyed all his domestic opponents, real or imagined, now surrounds himself with Romano-Byzantine pomp and grandeur. The theatrical civic festivals, processions of venerable prelates, cult of statues, embarrassing shows of piety, endless laying of wreaths, and choreographed entrances down halls lined with soldiers standing at attention—all trace directly back to czarism, to Byzantine Constantinople, and ultimately to imperial Rome. Indeed, Putin considers himself as Russia’s new “czar,” the Russified form of the Latin “Caesar.”But besides all the parallel heroics, Roman history offers profound lessons for today’s world. All of America’s Founders saw the Roman Republic as the best model for their own constitution. Napoleon, Mussolini, and Hitler, by contrast, found in imperial Rome a stunning model for their own grandeur. True, some of Rome’s ancient chroniclers, including the celebrated Livy, so admired specific politicians that they saw only their good sides and ignored the problems and failures. Yet there were others, notably the pessimistic Sallust, who not only wrote bluntly of history’s painful issues but delved deep into their causes and consequences.Is Putin likely to delve into the history of Rome for insights on his own situation? Unfortunately for Russia, Putin is not a reader, preferring instead to engage in exhibitionist athletic activities, preside at solemn ceremonies, or offer avuncular obiter dicta. However, if he would study the Roman past, he might come to realize that that model presents more than a few chilling prospects that he will ignore at his peril.To take but one example, a glance at Roman history would remind Putin that self-declared victories may not be as victorious as he and Kremlin publicists want to think. Back in the 3rd century B.C., when Rome was still a small state in central Italy, it was attacked by a certain King Pyrrhus, a rival ruler from Epirus, a region along today’s border between Greece and Albania. In his first battles Pyrrhus routed the Roman legions, and celebrated accordingly. But matters did not end there.Like Pyrrhus, Putin’s army scored some early victories in its war on Ukraine. As recently as December 1, Putin’s Minister of Defense Sergei Shoigu was still claiming, in spite of all evidence to the contrary, that Russian forces “were advancing on all fronts.” Pyrrhus made similar false claims, only to discover that his own soldiers were no match for the determined Romans. As the Romans drove Pyrrhus’ army from the field, he groused, “If we win one more such victory against the Romans we will be utterly ruined,” which is exactly what happened. Pyrrhus’ statement gave Romans the term “Pyrrhic victory,” which we still use today. Putin should apply it to his “victories” at Bakhmut and Avdiivka.Another crisis in Rome’s early formation as a nation occurred when a peasant uprising threatened Rome itself and, according to the historian Livy, caused panic in the Roman capital. In desperation, the elders turned to Lucius Cincinnatus, who was neither a military man nor a professional politician, but who had earned respect as an effective leader. It took Cincinnatus only fifteen days to turn the tide, after which he returned to his farm. George Washington rightly admired Cincinnatus and consciously emulated him, returning after the Battle of Yorktown to Mount Vernon. By contrast, Putin’s “special military operation,” planned as a three-day romp, is now approaching the end of its second year. Putin, no Cincinnatus, doomed himself to being a lifer.Roman history is a millennium-long showcase of motivation or its absence. In this context, Putin might gain further insights by examining Rome’s centuries-long battle against the diverse tribes pressing the empire from the north. For centuries Rome’s legionnaires were well trained, disciplined, and committed. The list of their early victories is long. Both Julius Caesar and the philosopher-emperor-general Marcus Aurelius succeeded because they motivated and inspired their troops. But over time the Roman army was increasingly comprised of hirelings, déclassé men who fought not to save the empire but for money or a small piece of the bounty. Inflation and rising costs outpaced pay increases. Punishment was severe, in some cases including even crucifixion. In the end, Rome’s army eroded from within.This is what is happening to the Russian army today. Putin attacked Ukraine in February 2022 with what was then an army of several hundred thousand trained professional soldiers. But after the Ukrainians killed more than 320,000 Russian troops, their replacements were unwilling and surly conscripts and even criminals dragooned from Russia’s jails. Putin quite understandably fears such soldiers. Putin’s army, like that of the late Roman Empire, is collapsing from within.By contrast, Ukraine’s army at the time of the invasion was small and comprised mainly Soviet-trained holdovers. Both officers and troops of the line had to be quickly recruited from civilian professions and trained. Yet they quickly proved themselves to be disciplined and resourceful patriots, not tired time-servers. True, Ukraine is now conscripting troops, but these newcomers share their predecessors’ commitment to the nation and to their future lives in a free country.Sheer spite and a passion for avenging past failures figured prominently in Putin’s decisions to invade both Georgia and Ukraine. Roman history suggests that this isn’t smart. Back in 220 B.C., Rome defeated its great enemy, the North African state of Carthage. Anticipating Putin, the Carthaginian general Hannibal sought revenge. Acting out of spite, he assembled 700,000 foot soldiers, 78,000 mounted calvary, and a force of war elephants, and crossed the Alps. Though he was a brilliant general, Hannibal’s war of spite turned into a disaster.Why did Hannibal lose? Partly because of his sheer hubris and the spite that fed it, and also because the Romans avoided frontal battles and simply ground him down. They were prudently led by a general named Fabius Maximus, whom later Romans fondly remembered as “the Delayer.” Today it is the Ukrainians who are the Delayers. By grinding down Putin’s army and destroying its logistics they have positioned themselves for victory.The Roman Republic fell not because of any mass uprising but because of the machinations of Julius Caesar. A victorious general, Caesar looked the hero as he was installed as imperator. As was customary at such ceremonies, an official retainer placed behind the inductee solemnly repeated over and over the admonition to “Look behind you!” Caesar failed to do so and underestimated the opposition of a handful of officials and generals who feared the rise of a dictator perpetuus. Even if Putin chooses not to read Cicero, Plutarch, or Cassius Dio, he could productively spend an evening watching a Moscow production of Shakespeare’s The Tragedy of Julius Caesar.Turning to a very different issue, Putin seems blithely to assume that whenever Russia defeats a neighboring country it can easily win the hearts and minds of the conquered, whether by persuasion or force. This is what many Roman generals and governors thought as well, but they were wrong—fatally so. Speaking of the impact of corrupt officials sent by Rome to the provinces, the great orator-politician Cicero declared to the Roman Senate, “You cannot imagine how deeply they hate us.” Does Putin understand this?Finally, it is no secret that Russia today, like ancient Rome, is increasingly a land of immigrants; its economy depends on impoverished newcomers from Kyrgyzstan, Tajikistan, and elsewhere in Central Asia who fled to Russia in search of work. Yet Moscow treats them as third-class citizens and dragoons them as cannon fodder or “meat” to die by the thousands on the Ukrainian front. Rome faced a similar problem and wrestled with it unsuccessfully over several centuries. Over time the despised immigrants who poured across the Alps from Gaul demanded a voice in Roman affairs, and eventually took control of the western Roman Empire.Sad to say, neither Putin himself nor any others of Russia’s core group of leaders show the slightest interest in learning from relevant examples from Roman history or, for that matter, from any other useable past. Together they provide living proof of American philosopher George Santayana’s adage that, “Those who forget history are condemned to repeat it.” In Putin’s case, though, he seems never to have known it.
ABOUT THE AUTHORS: S. Frederick Starr, is a distinguished fellow specializing in Central Asia and the Caucasus at the American Foreign Policy Council and founding chairman of the Central Asia Caucasus Institute.
Additional Info- Author S. Frederick Starr
- Publication Type Analysis
- Published in/by American Purpose
- Publishing date January 4, 2024
- Publication Link Direct Link
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CACI Chairman S. Frederick Starr comments on "Preparing Now for a Post-Putin Russia"
Whether Russian President Vladimir Putin dies in office, is ousted in a palace coup, or relinquishes power for some unforeseen reason, the United States and its allies would face a radically different Russia with the Kremlin under new management. The geopolitical stakes mean that policymakers would be negligent not to plan for the consequences of a post-Putin Russia. On November 2, 2023, CACI Chairman S. Frederick Starr joined a panel organized by the Hudson Institute’s Center on Europe and Eurasia for a discussion on how US and allied policymakers can prepare for a Russia after Putin.
Click here to watch on YouTube or scroll down to watch the full panel discussion.
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Central Asia Diplomats Call for Closer Ties With US
REPRINTED with permission from Voice of America News
By Navbahor Imamova
WASHINGTON -- U.S.-based diplomats from Central Asia, a region long dominated by Russia and more recently China, say they are eager for more engagement with the United States.Many American foreign policy experts agree that a more robust relationship would be mutually beneficial, though U.S.-based nongovernmental organizations express deep concerns about human rights and authoritarian rule in the five countries: Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan.
Michael Delaney, a former U.S. trade official, argued in favor of greater engagement this week at a webinar organized by the American-Uzbekistan Chamber of Commerce.
He noted that three of the five republics are World Trade Organization members and the other two are in the accession process — a goal actively encouraged by the U.S. government.
"I've always believed that this is a geographically disadvantaged area. There are relatively small national economies," he said. But, he said, collectively the region represents a potentially more connected market, about 80 million people.
Key issues
In this virtual gathering, all five Central Asian ambassadors to Washington expressed eagerness to work on issues the U.S. has long pushed for, such as water and energy sustainability, security cooperation, environmental protection and climate, and connectivity.
Kazakhstan's Ambassador Yerzhan Ashikbayev said that despite all factors, the United States does not want to leave the field to China, its global competitor, which actively invests in the region.
"Recent visit by 20 companies to Kazakhstan as a part of certified U.S. trade mission, including technology giants like Apple, Microsoft, Google, but also other partners like Boeing, have shown a growing interest," Ashikbayev said.
The Kazakh diplomat described a "synergy" of economies and diplomatic efforts. All Central Asian states are committed to dialogue, trade and multilateralism, he said. "As we are witnessing the return of the divisive bloc mentalities almost unseen for 30 years, it's in our best interest to prevent Central Asia from turning into another battleground of global powers."
During his first tour of Central Asia earlier this year, Secretary of State Antony Blinken visited Kazakhstan and Uzbekistan, meeting separately with the foreign ministers of all five countries.
That was deeply appreciated, said Meret Orazov, Turkmenistan's longtime ambassador, who also praised the regular bilateral consultations the U.S. holds with these countries.
Uzbek Ambassador Furqat Sidiqov sees the U.S. as an important partner, with "long-standing friendship and cooperation which have only grown stronger over the years."
"The U.S. has played a significant role in promoting dialogue and cooperation among the Central Asian nations through initiatives such as the C5+1," he said, referring to a diplomatic platform comprising Washington and the region's five governments.
"This is where we address common concerns and enhance integration," said Sidiqov. "We encourage the U.S. to bolster this mechanism."
Tashkent regards Afghanistan as key to Central Asia's development, potentially linking the landlocked region to the markets and seaports of South Asia. Sidiqov said his country counts on American assistance.
'Possibility of positive change'
Fred Starr, chairman of the Central Asia-Caucasus Institute in Washington, ardently advocates for the U.S. to adopt closer political, economic and people-to-people ties with the region.
In a recent paper, he wrote that among dozens of officials, diplomats, entrepreneurs, experts, journalists and civil society leaders interviewed in Central Asia, "even those most critical of American positions saw the possibility of positive change and … all acknowledged that the need for change is on both sides, theirs as well as ours."
This is the only region that doesn't have its own organization, said Starr, arguing that the U.S. could support this effort. "We have not done so, probably because we think that this is somehow going to interfere with their relations with their other big neighbors, the north and east, but it's not going to. It's not against anyone."
"Easy to do, low cost, very big outcome," he added, also underscoring that "there is a feeling the U.S. should be much more attentive to security."
"Japan, the European Union, Russia, China, their top leaders have visited. … No U.S. president has ever set foot in Central Asia," he said. He added that regional officials are left to wonder, "Are we so insignificant that they can't take the time to visit?"
Starr urges U.S. President Joe Biden to convene the C5+1 in New York during the 78th session of the U.N. General Assembly in September. "This would not be a big drain on the president's time, but it would be symbolically extremely important," he said. "All of them want this to happen."
Read at VOA News -
Read CACI Chairman S. Frederick Starr's recent interview on the resurgence of Imperial Russia with The American Purpose
Why Russians Support the War: Jeffrey Gedmin interviews S. Frederick Starr on the resurgence of Imperial Russia.
The American Purpose, May 23, 2023
Jeffrey Gedmin: Do we have a Putin problem or a Russia problem today?
S. Frederick Starr: We have a Putin problem because we have a Russia problem. Bluntly, the mass of Russians are passive and easily manipulated—down to the moment they aren’t. Two decades ago they made a deal with Vladimir Putin, as they have done with many of his predecessors: You give us a basic income, prospects for a better future, and a country we can take pride in, and we will give you a free hand. This is the same formula for autocracy that prevailed in Soviet times, and, before that, under the czars. The difference is that this time Russia’s leader—Putin—and his entourage have adopted a bizarre and dangerous ideology, “Eurasianism,” that empowers them to expand Russian power at will over the entire former territory of the USSR and even beyond. It is a grand and awful vision that puffs up ruler and ruled alike.
What do most Russians think of this deal? It leaves them bereft of the normal rights of citizenship but free from its day-to-day responsibilities. So instead of debating, voting, and demonstrating, Russians store up their frustrations and then release them in elemental, often destructive, and usually futile acts of rebellion. This “Russia problem” leaves the prospect of change in Russia today in the hands of alienated members of Putin’s immediate entourage, many of whom share his vision of Russia’s destiny and are anyway subject to Putin’s ample levers for control. Thus, our “Putin problem” arises from our “Russia problem.”