The sanctions regime imposed on Russia by the United States and its allies continues to include a glaring omission: an oil and gas embargo, which accounts for nearly half of Russia’s export earnings.
Asked on Wednesday to sanction Russian oil exports, President Joe Biden said: “Nothing is on the table.” Biden is facing growing pressure from senators such as West Virginia Democrat Joe Manchin, who is partnering with Alaska Republican Sen. Lisa Markowski on a bill that would ban Russian oil imports.
While an oil and gas embargo could help cripple Russia’s financial resources, “suffocating” the nation on Western energy supplies could be too damaging to the United States and its allies, said Bill Browder, an asset manager who has specialized for years. as an investor in major Russian companies, including state-owned natural gas giant Gazprom.
Browder told Yahoo Finance that he supports the embargo, but understands the reluctance of countries that rely on Russian energy.
“Russian President Vladimir Putin is somehow holding us back, which has left the energy sector more or less untouched,” said Browder, chief executive of Hermitage Capital Management and a longtime critic of Putin.
“It will be difficult – it will be a difficult balancing act – because 40% of German households rely on Russian gas, 100% of Italian households, 100% of Australian households,” he added.
Even in the absence of an embargo on Russian oil and gas, prices have jumped in recent days. U.S. oil prices rose to their highest level in more than a decade on Wednesday, as Brent’s global benchmark exceeded $ 113 a barrel.
After Biden expressed readiness for sanctions against Russian oil on Wednesday, the administration seems to have minimized the likelihood of such a move. “We have no strategic interest in reducing global energy supplies,” Deputy Chief of Staff Carin Jean-Pierre told reporters, according to a CNN report.
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She added that the sanctions “will raise the price of the gas pump for Americans”, something the White House “knows a lot about”.
Despite its reluctance to sanction Russian oil exports, the United States and its allies have taken steps to damage the long-term prospects of Russia’s energy sector. Germany has suspended certification of Nord Stream 2, a 750-kilometer pipeline that will connect the two countries.
The United States has also unveiled new export restrictions that will target oil-refined technology targeting Russia, Reuters reported on Wednesday.
“Now you’ll see massive accelerated strategic diversification,” Browder said.
“You can’t make a decision and say, ‘We’re going to buy gas from the Qataris tomorrow,'” Browder said. “You need ports and pipelines and all sorts of other things.”
FILE – A torch burns excess natural gas in an oil well on August 26, 2021 in Watford City, Northern Northern Ireland. Republican politicians in the United States have criticized President Joe Biden for his domestic energy policy and called on his administration to do more to boost domestic production. Sanctions imposed by the United States and its allies on Russia’s war with Ukraine so far do not include the country’s oil and gas exports, a move that would seriously damage Russia’s ability to generate revenue. (AP Photo / Matthew Brown, File)
In the late 1990s and early 2000s, Browder’s firm achieved a strong return by exposing corruption in major Russian companies, leading to company turmoil and rising stock prices. In 2005, Browder was denied re-entry into Russia and later fell victim to a Russian government scheme to undermine his company, he said.
Sergei Magnitsky, a lawyer hired by Browder to investigate Russian corruption, was arrested and died in Russian custody.
Speaking to Yahoo Finance, Browder explained why the oil and gas embargo is in line with the main purpose of sanctions against Russia.
“The main reason we’re doing some of these things is to run out of resources so he doesn’t have the finances to continue his military expansion,” he said.
“Therefore, if this is the goal, then we must cripple every resource it has that generates money,” he added.
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