In the wake of Vladimir Putin’s invasion of Ukraine, no European in their right mind wants Russia to have the free cash flow that its hydrocarbon exports currently provide. And the European Union, the United States, and their allies are already on track to remove this major source of the Kremlin’s geopolitical leverage.
WASHINGTON / KYIV – Russia looms large in world energy markets. It supplies 40% of the gas consumed in the European Union, and this is a particularly important economic issue for Germany, Italy, and Austria. But Russia’s global energy footprint is largely about oil. It is the second-largest exporter of crude, behind only Saudi Arabia, averaging about five million barrels per day. Russia also exports some 2.85 million barrels of refined products, such as diesel and aviation fuel.
These fossil-fuel exports have enabled Russia’s invasion of Ukraine and its extreme violence against unarmed civilians and civilian infrastructure. Russian President Vladimir Putin apparently believes that no one can stand up to him because of the naked power that he can exert through energy markets. If the Europeans resist too much, he will cut off their gas. If the rest of the world cuts back on their purchases from Russia, the price of oil will rise – causing economic difficulties everywhere.
But Putin underestimated the horror and fear that his invasion would create, particularly in Europe. Even worse for him, the United States, Europe, and their allies have all the tools needed to end Russia’s energy leverage. Importers around the world are shunning Russian oil and gas. Europe, certainly, will never again risk its national security on Russian energy imports. Consequently, Russia will soon be finished as a major player in world energy markets.
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