Better late than never? The Ukrainians may differ with that sentiment, but at least Joe Biden has finally gotten serious about plugging the big gap in Russian sanctions. Or so says the New York Times, which lays out a proposed sanctions regime that would finally cut off Vladimir Putin’s ability to fund his incompetent war operations, if it comes to fruition at all:
The Biden administration is developing plans to further choke Russia’s oil revenues with the long-term goal of destroying the country’s central role in the global energy economy, current and former U.S. officials say, a major escalatory step that could put the United States in political conflict with China, India, Turkey and other nations that buy Russian oil.
The proposed measures include imposing a price cap on Russian oil, backed by so-called secondary sanctions, which would punish foreign buyers that do not comply with U.S. restrictions by blocking them from doing business with American companies and those of partner nations.
As President Vladimir V. Putin wages war in Ukraine, the United States and its allies have imposed sanctions on Russia that have battered its economy. But the nearly $20 billion per month that Russia continues to reap from oil sales could sustain the sort of grinding conflict underway in eastern Ukraine and finance any future aggressions, according to officials and experts.
Yes indeed, and this gap in the sanctions has been pointed out many times over the last three months, especially by Ukrainian officials. Biden’s reluctance to make a move on Russian oil exports came in part because his European allies were equally reluctant at first to give up cheap energy imports, hoping that the initial shock wave of sanctions would change Putin’s mind. With the exception of Hungary, that European reluctance has long since faded.
So what’s the problem? Biden’s domestic political and economic woes:
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U.S. officials say the main question now is how to starve Moscow of that money while ensuring that global oil supplies do not drop, which could lead to a rise in prices that benefits Mr. Putin and worsens inflation in the United States and elsewhere. As U.S. elections loom, President Biden has said a top priority is dealing with inflation.
Biden waited three months to use truly effective sanctions because he doesn’t want to ramp up domestic production capacity. Presumably, Biden thinks targeting Russia’s oil exports now will save lives by starving Putin’s military. Imagine how many lives in Ukraine we might have saved before now if that turns out to be true and we had implemented these obvious measures at the time of the invasion three months ago. Instead, Biden wanted cheap Russian oil on the markets to keep the global price from ticking up even farther rather than taking steps to use American oil and natural gas production strategically, as we were able to do before Biden came into office.
Before anyone can say, “It will take months to get that kind of production back on line,” just remember that it’s already been months since the invasion. Plus, inflation and gas prices have been escalating for a full year now, thanks in large part to Biden’s EO 13990 and the dampening effect it has had on exploration, extraction, and capital investment. Just reversing that in February might have had enough of a salutary effect on the markets to offset the kind of sanctions regime that Biden’s now contemplating.
On top of that, the White House is now crowing about its invocation of the Defense Production Act to boost infant-formula manufacturing and solve a shortage that Biden and his team ignored for months. This is mainly a stunt, as the shortage in infant formula preceded the FDA’s shutdown of Abbott and is largely caused by the supply-chain crises that Biden has ignored and then fumbled for more than a year. Plus, it will take months for any DPA redistribution to produce products on the shelves, by which point the formula shortage should be resolved with foreign producers and a re-start at Abbott.
A proper use of the DPA, however, would have been to vastly increase oil production in reaction to Russian military aggression in Europe. That’s the kind of defense-related crisis for which the DPA was written. Why not use the DPA to deal with oil production and eliminate the strategic leverage Russia has over us in oil markets and the economy? Because Biden is too beholden to progressive climate-change activists, who see higher prices as a feature rather than a bug, and hope to leverage energy inflation to force alternatives into competitive positions against oil and natural gas. Biden would rather pander to those radical environmentalists than take basic steps to improve the US strategic and economic position, even with Putin starting wars in Europe.
So yeah, give Biden one cheer for finally doing something effective to curtail Russian oil sales. Give him another three raspberries for not doing anything effective to change direction on American production, though, and at the same time, let’s ask this: has Biden done anything to stop a deal with Iran that will put billions of dollars into the hands of Putin’s oligarchical allies?
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