US & Europe move to cut off Putin’s fossil fuel revenues
With pressure mounting across the world to stop all funding of Vladimir Putin’s war machine, the United States announced Tuesday it would ban the import of oil, liquefied natural gas, and coal from Russia. The US announcement says the move is intended to deprive Putin “of the economic resources he uses to continue his needles war of choice”, and adds:
“As a result of our historic, multilateral coordination, Russia has become a global economic and financial pariah. Over 30 countries representing well over half the world’s economy have announced sanctions that impose immediate and severe economic costs on Russia, cut off access to high-tech technology, sap its growth potential, and weaken its military for years to come.”
The European Union announced a new long-term plan that would phase out two-thirds of its gas imports from Russia this year. In announcing the REPowerEU plan, European Commission President Ursula Von der Leyen said:
“We must become independent from Russian oil, coal and gas. We simply cannot rely on a supplier who explicitly threatens us. We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition. The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system.”
With Russia’s banks struggling to operate, its stock market frozen, and its currency hitting historic low values, these new sanctions could make it impossible for Putin to avoid a default on Russia’s international loans.
The importance of cutting off Putin’s fossil fuel revenues was made clear by still more horrifying news coming out of Ukraine:
For the fourth consecutive day, Putin’s forces attacked civilians attempting to use agreed humanitarian corridors to evacuate cities under bombardment.
Ukraine reports Russia has entirely disconnected the Chernobyl nuclear power plant from the grid, making it impossible to communicate with staff inside or to monitor conditions there.
This has raised fears the cooling of spent nuclear fuel rods could be halted—an ominous sign Putin may be creating a radiological emergency, either to extort concessions or to use as a false flag excuse for invading Ukraine.
Intelligence assessments suggest Putin plans to devastate Ukrainian cities and towns, in an effort to force surrender.
While Ukraine argued to the UN’s highest court that Russia must cease its atrocities, Russia skipped the hearing, calling the demand that it cease its illegal invasion of Ukraine “absurd”.
It is increasingly clear that Putin’s regime will not honor any agreement, or any aspect of the rule of law. The campaign of terror against civilians ensures Putin will eventually face war crimes charges, and his regime will eventually be suspended from any venue where legitimate nation state representatives gather, other than the courts where he and the regime face trial.
Given there is no discernible military or security objective served by this behavior, there are mounting concerns Putin is in fact engaged in a war of genocide and ethnocide, aiming to wipe out the true history of Ukraine and its people’s willingness to uphold and defend their culture. It is also suspected he will aim to take every inch of Ukraine’s territory for Russian resource extraction and further military operations.
The value of Ukraine as an economic weapon for Putin is almost incalculable. If he succeeds in annexing Ukraine, his regime would control nearly 30% of world wheat exports and nearly 20% of corn, along with more than half of some oilseed commodities. The resulting power to extort concessions from other nations would make his regime even more dangerous than his energy extortion does.
Western leaders are warning intelligence suggests Putin is increasingly driven by anger and may be obsessed with the idea of seizing other nations’ territory by force. While his forces commit atrocities, they are also proving to be far less effective than legend would have it. Putin’s military seems limited to using the massacre of civilians as a way to create chaos and then subjugate local leaders.
The commitment to take on complicated economic and fiscal challenges, by further reducing fuel supplies, in the midst of an OPEC Plus pact to drive prices up by cutting supplies, is a clear sign of resolve from western leaders, to disallow Putin access to the levers of power he uses to attack his neighbors. The effort will have to be comprehensive, sustained, and reinforced with safeguards and specialized financing and incentives, to neutralize countermeasures that might leverage markets to undermine support for the bans.