The United States and its allies must prevent Russia from exporting oil and natural gas as an economic deterrent to its unprovoked invasion of Ukraine, Senator Marco Rubio told CNBC on Tuesday.
In the Squawk Box, the Florida Republican, a member of the Senate Foreign Relations Committee, cited two reasons why Russian President Vladimir Putin thought he could get away with attacking Ukraine: “№ 1 is oil and gas and number 2 is is a nuclear weapon. We need to take one of these two.
Withdrawal of Russia’s nuclear weapons is not really an option. In fact, Putin put nuclear deterrence forces on high alert earlier this week.
This leaves sanctions. But so far, the wide range of measures taken by the United States and Western nations to put pressure on Putin has not included directly targeted Russian oil for fears that energy prices will be even higher. US and international crude oil prices on Tuesday jumped to their highest levels since the summer of 2014, months after Russia regained Crimea from Ukraine.
Asked whether Russia should be prevented from exporting its oil and gas as a lever in the current crisis in Ukraine, Rubio said: “I think we can and should.”
Canada said Monday it would ban Russian oil imports, making it the only country directly targeting Russia’s energy sector. Last week, Germany halted the Nord Stream 2 natural gas pipeline project in the Baltic Sea, which aimed to increase the flow of Russian gas directly to Germany.
Rubio also said he would like to see President Joe Biden use Tuesday’s State of the Union address to encourage the United States to return to oil and natural gas levels before the Covid pandemic.
“What I would like to hear is that I will not hear, and this is the president who is announcing that America will return to the business of aggressive oil and gas production and exports, and that we will do that in connection with the gradual reduction and final elimination of Russian oil imports, “Rubio said.
Although Russia is not a leading supplier of oil to the United States, imports from Russia have increased in recent years. “The United States needs to go back to where we were in 2019 and 2020, when we exported more than we imported,” Rubio said, calling it the “ultimate lever” against Russia. He reiterated his call in a later tweet, calling on the United States to divert money from “criminals like Putin.”
Rubio also told Squawk Box on Tuesday that the world must maintain economic pressure on Putin. “We need to make sure these things are sustainable.”
On Monday, Russia’s ruble, the ruble, collapsed under international sanctions. To try to stop the collapse, Russia’s central bank raised its key interest rate to 20% from 9.5%.
Russia’s stock market in Moscow closed on Monday and remained so on Tuesday. However, Russian exchange-traded funds continued to trade in the United States, losing in the last two sessions.