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June 11, 2019

Why Russia Is in a World of Geopolitical Hurt

The U.S. is using natural gas to cause a little pain for Putin and Moscow.

The near-collision between a Russian Navy Udaloy-class destroyer and the United States Ticonderoga-class guided-missile cruiser USS Chancellorsville (CG 62) has generated a lot of media coverage. It should have — this was an incident where a lot of sailors on both ships could have been killed. So, in light of this, how much should we worry about Russia?

This is not an idle question, given some very real issues that have cropped up with NATO’s military readiness — which is why Canada and Germany were called out last year by President Donald Trump. Canada required a bailout from Chile due to a lack of underway replenishment vessels. Germany’s force of Tornados was grounded thanks to bad biofuel. This sort of stuff tends to make discouraging bad Russian behavior even harder.

You may have heard by now that Russia isn’t exactly friendly to the United States. Russia also has a lot of nukes. That said, this is a country that really has only two major export commodities upon which it can rely. One is weapons systems, and the other is oil and gas. The latter, can be more easily affected by American policy.

Hitting Russia’s oil and gas profitability has been done before. In Peter Schweizer’s book Victory and from a Twitter thread by historian Larry Schweikart, who recently released a biography of Ronald Reagan, we learn that President Reagan worked with the Saudis to cause oil prices to drop, and thus cripple the Soviet Union’s economy in the 1980s as part of a comprehensive strategy. Well, Trump is doing the same thing with American natural-gas exports that Reagan did via deals with the Saudis.

When we discussed why Russia obtained geopolticial kompromat over Germany, natural gas was a big part of it. With relatively high gas prices, Russia can not only rake in a lot of hard currency via exports to Europe, it also gains leverage on policy — simply by cutting off the gas.

This is why Trump was celebrating natural-gas exports not so long ago. Think about this: By exporting natural gas to Europe (or around the world), the price is going to drop. Now, Vladimir Putin can no longer guarantee that Russia is going to supply that whole natural-gas pie. Poland can instead buy its gas from America.

This also costs Putin leverage. Earlier, he could just cut off sales and cudgel European countries into submission. Now, since they can buy gas from America, these European nations are less vulnerable to Russia messing with their energy supply. Oh, and Russia’s lower earnings from gas exports will hurt its efforts to upgrade its military with things like the Armata armored fighting vehicle and fifth-generation fighters.

So Russia now has to play catch-up in terms of weapons technology (the United States has operational squadrons of F-35s), build up numbers (if you think our Navy has declined, look at Russia’s), and it has a much smaller budget to do so. The big reason is Donald Trump’s work at promoting American energy — not just for our use, but for the rest of the world. That is a big reason why Russia is in a world of geopolitical hurt.

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