How the U.S. Can Siphon Russia’s Oil Revenue
To inflict maximum economic pain on Putin, eliminate his petroleum from global markets.
As Vladimir Putin’s troops trample Ukraine, the West must inflict maximum economic pain on Russia. That means going after energy. Yet not all energy is the same. Although Russian energy exports represent about 60% of the country’s revenue, natural gas makes up less than 10% of that and oil and refined products roughly 90%.
Before the invasion, the U.S. focused its energy sanctions on Nord Stream 2, a natural-gas pipeline that gave Mr. Putin geopolitical leverage over dependent countries. But almost two weeks into the assault on Ukraine, we must consider sanctions under an entirely new war paradigm. Members of Congress have introduced legislation to ban Russian oil imports, reasoning that Americans shouldn’t help underwrite Mr. Putin’s war crimes. On Tuesday, President Biden said the U.S. will ban imports of Russian oil. But like presidents before him, he seems wary of actions that could increase prices at the pump. The administration could strike a balance of causing real pain in Russia while mitigating harm at home if it incorporates lessons from recent history.