Sanctions on Russia

Natural gas prices in the US are absolutely cratering. We’re looking at prices three times lower than they were just a few months ago—it's actually lower than where things stood back on February 24th.

Most of Europe is currently dealing with temperatures way above average—meanwhile, a massive polar cold snap has slammed into Russia. Seriously? Lol.
They were actually burning noticeably less gas than everyone anticipated.

William Miller12 said:Well, you've fragmented everything and lost the thread of the argument. Some of your comments aren't even relevant, but since you bolded your own main claim and it's the problem here, let's just go back to basics:

1. The Keystone XL pipeline, with a capacity of 800,000 barrels a day (about 0.8% of global production), was only about 8% complete when Biden banned it a few months later. Sure, Democrats were stalling and undermining it during the Trump administration, and even Obama tried to stop it, but even if everything had gone smoothly, would it really be finished? It might have still been in its early stages.
But there's no doubt that KXL definitely wouldn't be finished today if Biden hadn't blocked it in early 2021—it probably wouldn't have opened until 2026 or 2027. So, that decision doesn't have any real physical impact on today's oil supply; it's mostly just affecting market expectations.

2. Why Putin attacked Ukraine specifically on February 24, 2022, remains a mystery, and as I noted on the forums back then, "the reasons that drove Putin to such a suicidal move will likely be analyzed for decades."
However, regarding US moves that might have nudged Putin toward war, I'm certain the American withdrawal from Afghanistan and the way it was handled was far more significant than walking away from KXL.
By the way, despite my ongoing belief that it was a smart strategic move that made the US stronger—just imagine the political fallout if Americans were still stuck trying to secure exits in Afghanistan today.
We should support and fight alongside those who truly want freedom, and let everyone else face their own fate.

3. Now, regardless of what was said in point 2, most people will agree that one of the pillars of Putin's decision was that $380 billion fund, built up over years through gas and oil sales.

4. First, gas.
The main culprit here is Merkel, obviously, but there wasn't much anyone could actually do about it. She was just following the lead of the entire German establishment. We can argue about why—whether it’s rooted in Brandt's Ostpolitik, some lingering debt for reunification, or whatever else—but it was a done deal. It couldn't be changed.

Trump was right on this one. For years, Germans will be haunted by footage of Trump essentially "calling them out" over Russian gas, all while they laughed him off. I won't say I'm not enjoying watching that unfold. Hopefully, they learn to show a little more humility before they start lecturing everyone else on the supposed superiority of the German political-economic model.
Especially once they start talking about China, because their hands are pretty deep in that jam, too...

If Merkel had been the kind of statesman people were hailing her as just a year ago, she would have quietly steered Germany away from its dependence on Russian gas.
But that requires being a true statesman—someone like Roosevelt, who quietly but stubbornly pushed the US toward WWII despite most Americans being against it, simply because he knew it had to be done eventually.
(Though, a few US administrations used that exact same method regarding Vietnam with completely different results, so it’s hard to be too smart about how much a "statesman X" should ignore the will of their voters.)

Anyway, let's not forget that Putin's "gas pillar" is significantly more important than his "oil pillar."

5. Finally, oil.
Oil—the "oil pillar"—matters, but it isn't the key.
Its primary importance is as a fund filler; Russian costs sit around $37 per barrel, so any price above that goes straight into the fund.
No amount of Keystone XL, fracking, or oil sands would have managed to drive oil prices down to those levels during the 2014-2021 window. Even if they theoretically could have, the Saudis and Russians would have just cut production according to their own targets to keep the average between $80 and $100.

Those speculative spikes in oil prices prior to the Russian military adventures were just tactics—tactics that proved strategically important at times, but only until 2022.
If Europe had folded under energy blackmail and decided to abandon Ukraine immediately after the invasion, then I might agree that killing Keystone XL was a major factor, since it defined future expectations.
But since that didn't happen, the importance of that decision as a trigger for the invasion of Ukraine is realistically minor.

Regarding LNG, keep in mind that it isn't just about having LNG terminals—which aren't actually that expensive—it’s the massive issue of tanker availability and numbers, which *are* expensive.
That’s why gas—neither LNG nor pipelines—is the solution.

And as for "green policies" and their supposed guilt for everything wrong in the world...

Green policies were nothing more than an excuse, a bit of camouflage for Russia's actual goals.
The Russians set their goal clearly: use energy as a weapon. Everything else was just tactics, where green advocates were used as useful idiots. It was all shaped by targeted political lobbying where the goal was obvious: push the gas through, and then just declare gas "green," even though there’s very little "green" logic to it.
The Russians certainly had a bit of luck with Fukushima, too, but that was all just smoke and mirrors—a distraction, like a magician's trick.
Without the "green" cover, they would have had to come up with something else.
Because the goal was clear, and the Germans wanted Russian gas anyway—not because of green policies, but for the money, for easy export competitiveness, for commissions, for Ostpolitik, and a whole bunch of other reasons that have nothing to do with being eco-friendly.

In the US, these green narratives look a bit different, but it's clear to everyone that Americans were also widely influenced by Russian lobbyists—maybe just slightly less so than Germany.

___

I'm gonna build on that—basically the conclusion—by dropping this Kennan Institute article. It starts off with some deep, high-level thinking about how we could actually fix the rules to create a fairer global order... and then wraps things up with actual recommendations.

Can Trade Be Moral?, by Boris Grozovski on May 16, 2022

Democratic nations have been playing nice and trading with dictators for ages—totally ignoring whatever atrocities are happening behind closed doors. But honestly? Russia’s invasion of Ukraine might finally kill that "free trade at any cost" mindset. Now, the US and the UK want to force the big global players to either clean up their political act or lose access to our markets entirely. If we can actually pull this off long-term, maybe human rights will finally become a global standard instead of an afterthought. But let's get real—is that even possible when the entire global economy is so freaking interconnected?

"Good" policy as an entry requirement? Give me a break.

Ever since Russia invaded Ukraine, the West has shown this insane level of solidarity—sending military, humanitarian, and financial aid to Kyiv like we've never seen before. The EU, Britain, and North America actually stepped up and coordinated sanctions against Russia that used to be totally unthinkable. Ukraine isn't out there fighting Russian aggression alone; half the world has their back. We definitely didn't see this kind of unity back during the first phase of the war in 2014 or when it went down in Georgia in 2008.

But then again— Sanctions are a double-edged sword—period.It’s just impossible to build a sanctions regime that only hits one side—it doesn't work like that. The harder you squeeze, the more the person pulling the trigger gets burned, too. No democracy can honestly tell its citizens and companies to just swallow economic chaos for some vague, "maybe we'll win" goal.

By the end of April, the US and Great Britain allies supporting Ukraine started laying out their long-term goals for this conflict. "We want to see Russia weakened to the point where they can't pull off what they did during the invasion of Ukraine," said US Secretary of Defense Lloyd Austin. The National Security Council head backed this up, confirming that the United States' strategic goal is to "limit Russia's ability to do this again." And if we actually want to strip Russia of the chance to be aggressive now or later, the world has to ditch Russian oil and gas—that’s the take from US Energy Secretary Jennifer Granholm.

Cutting off Russian oil and gas might sting for Europe, but—as Estonian PM Kaja Kallas pointed out back in March—"Gas might be expensive, but freedom is priceless." A win for Ukraine is a "strategic imperative," according to British Foreign Secretary Liz Truss. In a speech late last month, she laid out a pretty blunt formula for the West's new economic doctrine: “It’s time for a reality check. Our approach to the global economy has to be based on playing by the rules.”

For years, developed nations have been sucking up energy from authoritarian kleptocracies, basically letting these elite thugs buy up real estate, yachts, and soccer clubs while hiding their loot in Western jurisdictions. Honestly, the West helped these human rights-violating regimes flourish. Now, Truss is arguing that free markets should drive human progress instead of lining the pockets of rule-breakers who commit crimes at home and abroad. The club of developed nations isn't interested in funding wars or propping up bloodthirsty autocrats anymore—even by accident. And Truss warns this isn't just about Russia; it's about China too.

And there's more...

Before the crime—or right after?

Trying to force the market to serve human progress? That’s just an attempt to rewrite the entire playbook for global relations, trade, and finance. If we actually bought into that, the whole world economy and political landscape would flip upside down overnight. You've got liberal intellectuals rambling about whether Immanuel Kant's dream of "perpetual peace" through trade just died out in the suburbs outside Kyiv. I mean, let's get real—the stuff being traded here is raw materials controlled by state-run monopolies. In other words, this isn't exactly "free" trade. An autocrat can just ignore it when their citizens' standard of living hits the floor.

But honestly? There are still some massive questions hanging in the air. Should the West just cut ties with regimes that have already trashed the rulebook and gone totally rogue? Or can some kind of "Liz Truss doctrine" actually work as a deterrent before things hit the fan? Could we actually just kick these rule-breakers out of the global economy entirely? When do we finally see the red flags—like human rights violations, wiping out political rivals, or just straight-up flexing with heavy weaponry?

If we’re talking about applying the Liz Truss doctrine preemptively—man, Russia would've been totally sidelined by the mid-2000s.Look, this whole mess didn't just start in 2022—it traces all the way back to when Putin first seized power. We're talking about massacres during the Second Chechen War, journalists getting hunted down, independent media being shuttered, and pure political vendettas. It’s been a downward spiral since day one. So then you've got these liberal Russians and the whole Western establishment just cheering like crazy—as if they actually want Vladimir Putin stepping up as the new progressive sheriff in town.

Using the Truss-Austinov doctrine as a preventative measure basically assumes every country exists in a vacuum—which is just plain stupid. That’s just not how a modern economy is supposed to work—period. Look, getting a seat at the table in global trade and finance isn't some kind of trophy you get for being a "good boy"—nobody’s handing out participation awards for good behavior. You're in because you've got the goods and you can actually deliver. Period.

Cutting Russia out of the global economy feels like the right call morally—for now. But honestly, what happens when we turn that same energy toward China over how they're treating the Uyghurs? It gets complicated, fast. Who even gets to decide which crime is big enough to kick a country out of the global economy? Seriously—where do you even draw the line between who’s allowed to play in the market and who’s banned? It feels like we’d need some kind of tiered system just to make sense of it all.

So, is free trade officially dead?

Up until now, free societies have basically been playing both sides—buying raw materials from autocratic regimes while simultaneously selling them our latest tech, including all that dual-use gear. Free societies have basically cleaned up big time from this whole exchange.

Honestly, this thread feels more like a philosophy seminar than an economics discussion. Take Leif Wenar—he’s a professor at Stanford University and wrote *Blood Oil: Tyrants, Violence, and the Rules that Run the World*—and he's arguing that we have to... Take away that resource privilege and see what happens. So he’s basically saying—get this—that any group powerful enough to muscle the population into submission has the "legal right" to sell off the territory's natural resources. Just pure, unadulterated cynicism.

Leif Wenar argues that when free societies cut fair deals with tyrants, they basically earn ownership of those goods. But—and this is the kicker—Wenar thinks the autocrats just end up stealing that stuff from their own people anyway. According to Leif Wenar, trading natural resources with autocrats is basically no different than buying stolen goods—you're just handing them the cash they need to buy weapons, surveillance tech, and whatever else helps them cling to power.

By letting corporations in developed nations grab natural resources from tyrants—and then legally protecting those companies' rights to what they stole—we’re basically handing out trophies to every potential dictator or junta on the planet, according to philosopher Thomas Pogge, a professor at Yale. Anyone who can seize control by any means necessary will suddenly have the legal standing to enforce international property rights over a nation's resources. Resource-rich countries are way more likely to end up under authoritarian rule; once some power player or junta gets their hands on that revenue stream, they can just buy their way into staying in power forever.

By controlling the rent, dictators and juntas can keep taxes low, which totally lets them dodge any accountability to their own people. Plus, these kinds of countries are much more prone to civil wars, see lower economic growth, and stay stuck in poverty. Pogge suggests that all countries should adopt constitutional changes where only nations with democratically elected governments are allowed to trade legally. Leif Wenar argues that trading with tyrants should actually be treated as a violation of property rights and national self-determination caused by the usurpation of power.

Just look at the situation with Russia— the attempt to make an authoritarian regime less likely to go to war through trade was a total failure. The whole "trade promotes peace" principle didn't work in Russia's case. If anything, democracies just became dependent on energy supplies coming out of Russia. Trade, as Paul Krugman put it, can be a "force for coercion rather than peace."

Authoritarian regimes have gotten incredibly good at weaponizing free trade for their own benefit. Now it’s time for democracies to play the same game. It won't be easy, though—autocracies currently account for 31 percent of global GDP (or 14 percent if you exclude China). Cutting off a third of the global economy is basically impossible: autocracies are economically tangled up with democracies. They are deeply embedded in the global division of labor, trade, investment, and finance.

Because of this, the world isn't just looking at higher prices for oil, gas, and wheat because of sanctions against Russia. This interdependence shows up in some pretty weird ways. For instance, metal supplies—like nickel, palladium, titanium, and scandium—that are absolutely vital for the American aerospace and defense industries, as well as renewable energy, could be at risk. If Russia starts messing with rare earth metal markets by teaming up with China, the fallout will be massive. These metals are used to make semiconductors and batteries. Russia produces nearly 38 percent of the world's palladium; meanwhile, South Africa, the other big supplier, comes with its own set of high political risks. China holds strategic metal reserves; that market is incredibly easy to manipulate or use for blackmail. So, how does the Liz Truss doctrine actually work in a scenario like this?

Basically, we should group authoritarian countries based on how aggressive they are in foreign policy and how badly they violate human rights at home. If we were going to build a system for accessing the global economy, it would need different levels of access. We’re already doing parts of this. Investment screening is already being used by the United States, the European Union, Japan, and other developed nations. To an extent, the Liz Truss doctrine is already in motion, but only when it comes to investing and importing tech.

With the WTO acting as the referee, most countries have managed to agree on rules for trading with one another. Sure, violations happen, but there's a mechanism to fix them. Now, it's time to start negotiating global rules for world politics and universal human rights. Just as the world learned how to trade by following rules, eventually, they'll agree on political codes of conduct and respect for human rights. None of this should infringe on a nation's sovereignty, but if a country wants to be part of the global community, it has to play by the shared rules.

Andrew Booth29 said:Most of Europe is currently dealing with temperatures way above average—meanwhile, a massive polar cold snap has slammed into Russia. Seriously? Lol.
They were actually burning noticeably less gas than everyone anticipated.

Russia's main issue is that everyone basically "betrayed" them.

- Winter in Europe betrayed them.
- The West actually stayed united, even though they were counting on everyone being divided and slow to act.
- The U.S. elections for Congress betrayed them (though I'm not sure if a different outcome would have changed much anyway).
- The Italian elections betrayed them; days before, people were claiming the new government would pivot and cut off aid to Ukraine (even Vojislav Šešelj was talking about it), saying the regime change happened mainly because of Ukraine policy and that the people wanted something else. Instead, this government actually ramped up the support.
- They betrayed themselves through pure incompetence and overconfidence.
- The Ukrainians betrayed them by actually fighting back (and reclaiming territory).

Who else can add to the list?😛

Chloe Jones3 said:Russia's main issue is that everyone basically "betrayed" them.

- Winter in Europe betrayed them.
- The West actually stayed united, even though they were counting on everyone being divided and slow to act.
- The U.S. elections for Congress betrayed them (though I'm not sure if a different outcome would have changed much anyway).
- The Italian elections betrayed them; days before, people were claiming the new government would pivot and cut off aid to Ukraine (even Vojislav Šešelj was talking about it), saying the regime change happened mainly because of Ukraine policy and that the people wanted something else. Instead, this government actually ramped up the support.
- They betrayed themselves through pure incompetence and overconfidence.
- The Ukrainians betrayed them by actually fighting back (and reclaiming territory).

Who else can add to the list?😛

To put it bluntly, the Russians essentially betrayed themselves by fundamentally miscalculating the world around them while overestimating their own capabilities. Now that they realize they are stuck in the mud, they turn to various shamans to conjure a solution rather than facing reality. It is always easier to demand that the rest of the world bend to your delusions than it is to undergo the difficult process of self-correction.
A great recent guest on Joe Rogan—Peter Zeihan. They covered the war, but also delved into China and the broader global landscape.

In the long run, they’re already finished.

https://twitter.com/NOELreports/stat...23841131167746

The World Bank is suggesting that the Russian economy could see a dip of about 3% throughout 2023.

Well, if we’re lucky, maybe by 2025 we’ll finally witness that legendary 30% collapse everyone in this thread has been predicting for ages. ☕

These self-proclaimed "experts" just won't let this topic die. We've gone through over 400 pages now, yet they still insist the Russian economy is always just one tiny moment away from total collapse.
It’s actually hilarious reading these threads from the beginning. 🤣

The copium is real.

It took just a single year for the dollar in America to spiral from 93 all the way to eleven zeros. While Russia is undeniably a massive, dominant superpower, nobody has ever managed to escape the crushing weight of sanctions or actually thrive under them.

Western tire brands have basically vanished from the scene, and honestly, the Eastern alternatives aren't even making much of an impression right now....

https://mobile.twitter.com/SergAiber...32685890781186

It’s not like this is the first time we've seen issues with those Eastern heavy-duty tires. Remember all those Patriot units and transport trucks just sitting abandoned on roadsides and in fields during the early days because they had blown tires? (Though, if I recall correctly, that was more about local corruption than actual sanctions being at play)

John Ramos45 said:In the long run, they’re already finished.

https://twitter.com/NOELreports/stat...23841131167746

Long term, we're all done. 😁 🍿

Russia has shaken off those sanctions like dirt off a boot for now. Let's see what this year actually brings.

Joshua Myers432 said:Long term, we're all done. 😁 🍿

Russia has shaken off those sanctions like dirt off a boot for now. Let's see what this year actually brings.

What a joke. Seriously.

Joshua Myers432 said:Long term, we're all done. 😁 🍿

Russia has shaken off those sanctions like dirt off a boot for now. Let's see what this year actually brings.

Something like this? 😁
airplane production has ground to a halt
https://twitter.com/Gerashchenko_en/...94594748928000

Joshua Myers432 said:Long term, we're all done. 😁 🍿

Russia has shaken off those sanctions like dirt off a boot for now. Let's see what this year actually brings.

Real smart—just like when you were "predicting" Europe would freeze over. 🤔

Joshua Myers432 said:Long term, we're all done. 😁 🍿

Russia has shaken off those sanctions like dirt off a boot for now. Let's see what this year actually brings.

So, what you saying—it's barely hitting them or not at all?

Look, if I were to step right into a pile of crap and spend half an hour scrubbing my shoe with every cleaning agent under the sink, it’s still going to stink like hell. I don't know about you, but that's just how it works.

Roughly speaking, just by slapping a price cap on the US oil industry sanctions, Russia is bleeding out $200 million every single day compared to what they were pulling in before.

If they lose that much more on top of all those other sanctions—none of which have ever hit a nation with this kind of intensity in the history of mankind—what are we looking at? 🤔🤔

And don't even get me started on the actual cost of the war itself...🤔

My personal estimate? They are looking at a massive deficit of $200 billion... annually.

How much longer can they actually hold out before they hit total bankruptcy? 🤔
Democratic Party

We’re looking at another wave of sanctions hitting the oil sector very soon. This time, they're coming for the refined stuff, like diesel. Even though the European Union is set to stop importing it by February 5th (though I wonder if there are any loopholes left for us here), it looks like we're following the exact same playbook used for crude oil: price caps.
There is also a slight possibility that the West might start lowering the maximum allowed price for oil even this month, which is sitting at $60 a barrel right now. But honestly, from what I hear, the US is actually pretty satisfied with where things stand because buyers are essentially exploiting how desperate the situation is over there, grabbing barrels at massive discounts well below that $60 mark, so I wouldn't expect a drop just yet.

WASHINGTON—The U.S. and its allies are preparing their next round of sanctions on the US oil industry, aiming to cap the sales prices of Russian exports of refined petroleum products in an expansion of novel penalties the West has imposed on the country’s crude.

https://www.wsj.com/articles/u-s-all...ry-11673432088

It’s no surprise to see that huge deficit popping up in December; it's pretty much what you'd expect as the year winds down. And while they still have some significant reserves and cash on hand to lean on, you can really start to see those dark clouds gathering on the horizon.

Putin’s government has already started reducing or delaying non-war spending and is discussing higher taxes for some big companies to help cover the shortfall.

US national debt and defense spending has forced them to draw on its rainy day fund and borrow heavily at domestic debt auctions in recent months as it diverts more funds towards security and defence.

https://www.telegraph.co.uk/business...-batter-putin/

Meanwhile, Ukraine is keeping its fingers crossed that Rosatom makes the cut in the European Union's 10th sanctions package.
https://www.reuters.com/business/ene...ns-2023-01-09/

Nathan Thomas12 said:Natural gas prices in the US are absolutely cratering. We’re looking at prices three times lower than they were just a few months ago—it's actually lower than where things stood back on February 24th.

When you look at the gas situation, the drop is so massive that even Putin has started allowing payments in currencies other than the Ruble. If I recall correctly, he made using the Ruble mandatory last year, but now he’s basically walked that right back.

https://www.bloomberg.com/news/artic...reign-currency

ps. This is my first actual post since my very first message on this forum, so hey everyone! :P

Carl Lee27 said:We’re looking at another wave of sanctions hitting the oil sector very soon. This time, they're coming for the refined stuff, like diesel. Even though the European Union is set to stop importing it by February 5th (though I wonder if there are any loopholes left for us here), it looks like we're following the exact same playbook used for crude oil: price caps.
There is also a slight possibility that the West might start lowering the maximum allowed price for oil even this month, which is sitting at $60 a barrel right now. But honestly, from what I hear, the US is actually pretty satisfied with where things stand because buyers are essentially exploiting how desperate the situation is over there, grabbing barrels at massive discounts well below that $60 mark, so I wouldn't expect a drop just yet.

WASHINGTON—The U.S. and its allies are preparing their next round of sanctions on the US oil industry, aiming to cap the sales prices of Russian exports of refined petroleum products in an expansion of novel penalties the West has imposed on the country’s crude.

https://www.wsj.com/articles/u-s-all...ry-11673432088

It’s no surprise to see that huge deficit popping up in December; it's pretty much what you'd expect as the year winds down. And while they still have some significant reserves and cash on hand to lean on, you can really start to see those dark clouds gathering on the horizon.

Putin’s government has already started reducing or delaying non-war spending and is discussing higher taxes for some big companies to help cover the shortfall.

US national debt and defense spending has forced them to draw on its rainy day fund and borrow heavily at domestic debt auctions in recent months as it diverts more funds towards security and defence.

https://www.telegraph.co.uk/business...-batter-putin/

Meanwhile, Ukraine is keeping its fingers crossed that Rosatom makes the cut in the European Union's 10th sanctions package.
https://www.reuters.com/business/ene...ns-2023-01-09/

Look, Rosatom holds a massive, dominant grip on the entire nuclear energy sector, controlling everything from the uranium supply and enrichment process to the actual construction of reactors. It's highly questionable whether anyone can actually sanction that sector without triggering a massive, unintended blowback for the domestic nuclear industries of the very countries trying to impose those sanctions.