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Moscow Slings Insults Following Canadian Sanctions

So what do you do when a wealthy nation imposes sanctions on your chief – perhaps only – industry? In the case of Russia, the answer is to fling insults.

Here’s one from Mikhail Leontiev, a spokesman for Rosneft, Russia’s largest oil producer, though all of it doesn’t quite make sense. “In Canada the [oil] industry is in a near-death condition,” he told the Russian News Service, as quoted Feb. 18 by The Moscow Times. “This was sanctions against the departed, and I don’t mean Rosneft, I mean Canadian oil production.”

The comment came in response to a decision by the government of Canadian Prime Minister Stephen Harper to join the European Union and the United States in imposing sanctions against Rosneft and Rostec, a non-profit Russian conglomerate that promotes high-technology for both civil and military uses.

Related: What On Earth Are We Doing Looking For Oil In The Arctic?

Harper had been reluctant to impose any sanctions on either enterprise because both have key business interests in Canada. He had argued for months that any punishment should target Russia, not individual companies.

Nevertheless, Harper has frequently and publicly criticized Russian President Vladimir Putin, accusing him of engineering political and military interference in neighboring Ukraine, and on the evening of Feb. 17 he announced the sanctions. In particular he cited “escalated acts of aggression” by Russian-backed rebels on the city of Mariupol on Jan. 24.

“The collective sanctions imposed to date by Canada and its partners are putting real economic pressure on the Putin regime and its collaborators,” Harper said. “The cost to Russia will continue to rise if it persists in its escalation of the conflict and refuses to allow a peaceful resolution.”

The response from Russia was quick. Leontiev, the Rosneft spokesman, said Harper was merely fishing for votes from Canadians of Ukrainian descent. “Canada is a country preoccupied with its Ukrainian diaspora, a large part of which are [ultra-nationalists], that’s well-known,” he said. “There is a very strong lobby there.”

Leontiev’s curious phrasing of “sanctions against the departed” notwithstanding, he does have a point about the health of Canada’s oil industry. The 50 percent drop in the price of crude oil recently prompted the International Energy Agency, which advises 29 industrialized countries on energy policy, to forecast a 10 percent drop in Canadian oil production by 2020.

Related: Russia’s Complicated Relationship With OPEC

Still, insults won’t change the realities on the ground, and the sanctions, along with the plunge in oil prices, have hurt Russia’s economy as well, costing it an estimated $140 billion in 2014, according to Russian Finance Minister Anton Siluanov, and requiring a major revision in the country’s budget for 2015.

That isn’t stopping the talk from Moscow. Even the Foreign Ministry got into the act, calling Ottawa’s sanctions a “lame attempt” to undermine a cease-fire in embattled eastern Ukraine.

“We all hope that Ottawa will think about the consequences of its actions, which in reality further fuel an armed confrontation in Ukraine, and that it will realize the futility of pressuring Russia through sanctions,” the ministry said in a statement on Feb. 18.

By Andy Tully of Oilprice.com

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  • Lee James on February 21 2015 said:
    I think there is a big energy picture here. It's easy to become caught up in the details of the latest political impasse, and not see what's really happening.

    Petroleum is both a blessing and a curse, Canadians included. The many advantages of using petroleum as an energy source are obvious. But what are the downsides? In recent times, pollution has been a focus. And now there's an added production-cost premium. A growing percentage of oil is from conflict areas of the world, and higher-cost sources like shale and deep-water.

    A downside of petroleum that is back with a vengeance is geopolitics. Playing the oil card against an enemy is the first choice, in preference to other weapons. We are at the stage of economic warfare now. Canada is even joining in.

    Given Russia's need to export energy to balance the national budget, energy will be one of the main tools the West will select in countering Russian stridency.

    What I do not think the West understands is how resentful Russia is of the U.S. They see us as the #1 problem in the whole world. And Putin is #1 for restoring the glory of Tsarists Russia.

    Energy will be the tool of choice for exerting leverage, but where are the boundaries of this international disagreement? It's time for our dear leaders to get together and figure each other out. An oil card can be played, but to what end?

    We need extended talks, exchanges of frank points of view, and setting down of acceptable and enforceable limits. As it is, we have two Alpha countries going at it freestyle. The first shot has been fired: dethrone Russia's oil economy as a consequence of dishonest behavior on their border.

    We in the West need to ask, how is it that Putin has been able to redefine truth about columns of tanks and green men in the Ukraine? With a straight face, he says whatever he wants.

    Playing the oil card alone will likely be insufficient.
  • Russian Jew on February 21 2015 said:
    Russians should thank Canadians as "the useful idiots": with Their meaningless but hostile symbolic actions Canada helps Putin to consolidate Russians under his leadership. Russia has everything to fend off Western sodomites attack but unity is the key ingriedient for victory.
  • Michael on February 20 2015 said:
    Sanctions won't help...sanctions have not helped up to this point and they won't help in the future. Putin is hellbent to revive the Russian Empire, and unless the rest of the world will stand against this, he will revive the Russian Empire...next on the list:
    Belarus and Latvia...wait for a popular uprising of Russian speaking thugs there
  • Alan Parker on February 20 2015 said:
    I think its high time we understood that decisions like sanctions are not taken by Harper, they are made by our domineering partner south of the border, Harper simply obeys orders. By joining the 5 Eyes without the approval of the people, this man has actually sold out on his own people - exposing us to spying by foreign powers.

    Keeping in mind that Harper is simply a lackey, yes, the Russian's statement is a bit of an overreaction.

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