Money makes the world go round, and often drives the actions of greedy totalitarian dictators. When they feel rich, tyrants like Vladimir Putin will invade their neighbor and try to reshape the world order. Oil at $100 per barrel makes Putin feel rich and reckless.
The only way to confront dictators is to make them poor or make them afraid of losing their power base. The United States can’t do much about the latter, but we can take action to address the former. President Biden and our allies in the United Kingdom and the European Union have collaborated remarkably well to hit Putin and Russia in their wallets where it hurts.
Agreed upon sanctions have aimed at freezing the assets of Putin and his Foreign Minister, Sergei Lavrov. Some of Russia’s lenders have been removed from the important SWIFT global payment system. And more importantly, sanctions are now preventing the Central Bank of Russia from accessing its reserves and making payments for large dollar denominated items.
The Russian Ruble has collapsed. As a result, interest rates in Russia have skyrocketed to 20%. Putin and his oligarch cronies are losing billions, and Russia is now headed for a recession.
If Biden were truly tough though, he’d make a giant U-turn and lead America back to energy independence to drive down Russia’s only major source of wealth. Pre-pandemic, the USA was producing 13 million barrels of oil per day. Now, after Biden closed the Keystone Pipeline, shut down Anwar, and stopped new drilling on Federal lands, U.S. production is down to 11 million barrels per day. We could easily set a target of 15 million barrels a day and drive oil prices down 50%. That would truly get Putin’s attention and make him turn tail.