The political calculation at the heart of oil sanction reluctance
While a wide variety of sanctions, public and private, have been imposed on Russia for its invasion of Ukraine, oil and gas remain off the official list of forbidden products.
Unofficially, there’s a ban in place, as oil companies are very reluctant to buy Russian oil, even at a steep discount. The political and public relations fallout – never mind the logistics – are standing in the way.
So what’s causing governments to drag their feet on making sanctions official? Politics…and that includes the Biden administration. As the Wall Street Journal writes:
…the real White House reluctance here is political. The average gasoline price in the U.S. is already $4 a gallon, and Democrats fear this will increase the chances of an electoral wipeout in November.
Sad, but very likely true. But it hasn’t prevented posturing:
U.S. politicians are ducking [wider oil and gas sanctions] even as they rush to ban U.S. imports of Russian oil. The best argument for banning U.S. purchases is to show a reluctant Europe that the U.S. is willing to make sacrifices first. But Russia accounted for only 8% of U.S. petroleum imports and 3% of oil consumption last year. It wouldn’t be hard for the U.S. to replace this—or for Russia to find another buyer.
Democrats are rushing to embrace the U.S. ban in part as a shield against criticism of their party’s anti-fossil fuel policies. Nancy Pelosi has endorsed the idea, and vulnerable House Democrats like New Jersey’s Josh Gottheimer are jumping on board.
“We have the opportunity to cut off Putin’s largest revenue source, to support America’s own energy independence and security, and to work with our allies to stabilize the global energy market to help us mitigate rising energy costs for our hardworking families,” says Mr. Gottheimer.
A U.S. purchase ban would do none of those things. But it would let politicians claim credit for doing something even as they avoid the sanctions that really matter—on any company or bank in the world that buys Russian oil and gas.
One might think that U.S. politicians, regardless of their partisan base, would jump at the chance to expand American energy production (remember: it defangs the OPEC autocrats, too) and, as a side benefit spur the more rapid expansion of alternatives. After all, as gas gets more expensive, those electric cars look even better to more buyers.
Such an approach would take real courage in an election year. A rare thing, even absent global crisis. But we shall see if someone is willing to make the leap – and sell it to the public as not only the right thing to do today against Putinism, but in the long term for America.