Oil: Will Putin Be Second Time Lucky Weaponizing Global Supply?
investing.comKeeping Russians happy as elections approach or kicking Joe Biden between the legs over Ukraine? Vladimir Putin reckons he can do both — if oil prices cross $100 a barrel to limit any damage to the Russian economy from his chokes on supply.
Just six months ago, the West was relieved to see the Russian leader frustrated in his attempts to weaponize energy in the war against Ukraine.
Despite some early “successes” in causing panic across Europe when he partially turned off Russian gas supply to the bloc during the 2022/23 winter on the excuse of maintenance — and drove prices of heating fuels to record highs — it was Mother Nature, ultimately, that beat Putin.
More specifically, it was warm weather that delivered victory to his European rivals, who didn’t need Russian gas as much as he thought. In the warmth of that winter — and multiple setbacks to his forces dealt by the allied nations helping Kiev — the Kremlin boss stewed, red-faced, waiting for another opportunity.
That seems to have come now.
This week, Russia announced a ban on the export of diesel and petrol as crude prices hovered at or above $90 a barrel. Since last month, Moscow has also colluded with Saudi Arabia to contribute 300,000 barrels a day of its own oil to the kingdom’s bid to choke the global market with a daily cut of 1.0 million barrels.
The cumulative Saudi-Russian reduction of 1.3 million barrels per day has several things riding on it.
At the apex is a plan to make the world pay as much as possible for the multi-trillion dollar remodeling of the Saudi economy to make it free from its dependence on oil. And the Saudi way of achieving that — ironically — is to keep oil prices in the triple digits over the next few years (despite the denials
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