Sanctions can be effective in some circumstances, and they can be a powerful geopolitical tool. But sanctioning a product that is fungible and ubiquitous is merely a public relations effort and can have very little influence on reality. Oil is the perfect example, and we need to look no farther than China for a state actor that is perfectly willing to purchase sanctioned oil, and there is nothing anyone can do about it.
“Russia is swimming in cash,” Elina Ribakova, deputy chief economist at the Institute of International Finance, told The Wall Street Journal.
Ribakova said Russia has made about $97 billion from oil and gas sales this year with $74 billion coming from crude oil sales.
Before invading Ukraine in February, Russia supplied 40% of Europe’s gas. After the start of the war, Russia President Vladimir Putin throttled the Nord Stream gas pipeline to Germany and other European nations, raising energy prices around the world.
So Putin and his oligarchs are cutting supply, which raises prices and decreases the maintenance demands on their oil and gas fields. And let’s face it, there are thousands of oil and gas fields around the world, so if Russia really needs equipment they can always buy from countries that are not part of the 1st world sanctions. Sure, there is high-tech oil extraction, and Russia will be limited to lower tech stuff available in the third world, but with oil at $100/barrel, they don’t need to push production nearly as hard as when President Trump drove oil down into the $40 range.
But this is the best part!
However, the situation could change once European Union embargo on Russian crude and product imports comes into full effect, resulting in at least 1 million barrels daily having to go elsewhere.
Europe is already freaking out over the decrease in gas shipments through the monopoly pipeline that they accepted, so the idea that they are going to stop buying Russian oil and go to other sources is adorably naive. Although if the lights are out and there is frost on the inside of windows all across Europe this winter, I would be hard pressed to restrain a hearty chuckle.
There is a delicious bit of irony built into this ridiculous situation though…Israel will be selling gas to Europe! You know…apartheid, racist, Zionist, Jew-filled Israel…the worst country on earth according to the bien pensents in Paris and Rome and London.