Senators Propose New Russia Sanction Bill Targeting Oil

What is wrong with the United States and the Congress? More sanctions on Russia, punitive tariffs on China, intrusive sanctions to be introduced on Iran, sanctions on a NATO ally, Turkey and even a threat to sue OPEC for antitrust trade practices under NOPEC.

The repeatedly imposed sanctions on Russia are, we are told, intended to punish Russia for Putin’s continued desire to undermine American democracy, malign influence in Syria, aggression in Crimea, and other activities" and targets investments in energy projects supported by the Russian government both in the country and abroad.

While the United States has been claiming that it is fighting the ISIS in Syria, it was Russian air power and Russian and Syrian troops on the ground that broke the back of the ISIS in Syria and not American power. It was also Iraqi armed forces with help from Iran that broke the back of ISIS in Iraq.

As for Iran sanctions, it was President Trump who broke an international agreement on Iran’s nuclear programme not Iran. He just decided to walk away from the agreement without even suggesting any amendments to the nuclear deal nor any justifications for how Iran was violating the nuclear accord. In fact, the IAEA confirmed on May 9 that Iran is in compliance with its nuclear commitments.

As for the Crimea, Russia recovred what has always been an integral part of its territory.

Sanctioning Russia’s energy projects smacks of self-interest and geopolitics. The United States wants to prevent Russia from re-establishing itself as an energy superpower.

Putin’s plan is to turn Russia into the world’s energy superpower and it is working.
With its current network of gas pipelines to the European Union (EU) soon to be augmented by the Turkstream pipeline across the Black Sea to Turkey and Europe and the Nord Stream 2 under the Baltic to Germany, Russia will remain the unchallenged gas supplier to the European gas markets well into the future. Nothing US LNG can do 5o change the situation.

The imposition of tariffs on China are manifestations of the US deep worry about the petro-yuan undermining the petrodollar in a global oil market valued at $14 trillion and also undermining the US financial system.

The United States has so far broken the rules of the WTO by imposing sanctions on virtually everybody, walked away from United Nations-recognized Iran nuclear deal, also walked away from the UN-supported Climate Treaty without batting an eye lid.

By the time President Trump’s first term in office comes to an end, he would have singlehandedly antagonized the whole world leaving the United States without any allies or friends. If the EU is depicted by Trump as a foe, then NATO most of which members are also members of the EU is also a foe.

Other than the petro-yuan, what irritates the United States most is the Russian-Chinese strategic partnership. Russia and China hold the view that Washington’s alienation from both of them is reflected by the deeply rooted fear of the losing hegemonic status as the “only indispensable superpower”.

John Bolton and Senator John McCain, a co-sponsor of the new Security from Kremlin Aggression Act both have a tendency to bite off more than they can chew. If left to them, they will issue the orders to nuke Russia, China, Iran and North Korea without realizing that their country will be totally destroyed in the process.

Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London