To Inflict Pain on Russia, Target Its Energy First

The challenge confronting policymakers in Washington is how to safeguard and promote United States interests in Ukraine in a way that swiftly deters Russia from further escalation and compels President Vladimir Putin to stand down. Unfortunately, ejecting Russia from the G-8 or dispatching United Nations fact-finding missions is unlikely to move Moscow. Instead, inflicting costs on Russia for its intervention in Ukraine begins with using a tool very familiar to Moscow: energy.

At first glance, the U.S. may not appear to have vital interests at stake in a disagreement between Ukraine and Russia. Crimea is home to rampant corruption, a festering ethno-religious cleavage between Russian Orthodox Slavs and Muslim Tatars and the rather ineffective and dated Russian Black Sea Fleet. Frankly, there’s just not much here for the U.S. to care about.

However, there are two vital U.S. interests at stake in the unfolding situation.. The first has to do with the very rules of the international order. The U.S. has a vital interest in ensuring that sovereignty remains the coin of the international realm – specifically, that countries should not invade their neighbors on a whim or without consequence. Admittedly, the U.S. invasion of Iraq in 2003 risks characterizing American concern with Ukrainian sovereignty today as hypocritical – however, at least Washington’s actions in 2003 weren’t completely unilateral. In any case, sovereignty remains the backbone of the international order and without it global military, political and economic chaos are the results.

The second vital U.S. interest threatened by Russia’s invasion is the security and stability of treaty allies that border Ukraine – Poland, Slovakia, Hungary and Romania. Washington has lately come to think of its European NATO allies as security producers, not simply consumers of American-provided reassurance. In part, this is the result of European allies having sent tens of thousands of troops to fight alongside U.S. forces in Iraq and Afghanistan, but it also stems from Washington’s not unreasonable assessment that they face no existential security threats. To the average Pole though, security in Eastern Europe remains an unsettled issue and Moscow’s invasion only proves the point.

Whether America’s Eastern European allies are justifiably paranoid is open to debate, but what seems quite clear is that the U.S. and Russia are playing by different rules when it comes to international affairs. Moscow remains seized with the notion that its international relations are a zero-sum game, where every gain for the West is a loss for Russia. This mindset harkens to the Cold War but its roots go far deeper, across centuries of Russian insecurity stemming from that country’s lack of natural borders separating it from seemingly innumerable adjacent enemies. Meanwhile, Washington insists on treating international relations as a positive-sum game, defined as a world in which a rising tide lifts all boats. For the U.S., hard power and relative gains are certainly important, but so are norms, institutions and interdependence. For Putin, norms appear to matter only in the service of Russia’s hard power.

Given these different perspectives, how can Washington compel Moscow to step back? Engaging Russia on its own terms must be in the forefront of American foreign policy, and so cancelling U.S. participation in the G-8 Sochi meeting should have been last on a list of changes, not first. Ahead of it should have been an array of sharper tools better designed to command Putin’s attention. First should be a concerted U.S.-led effort to decrease the price of oil. Russia’s economy remains almost entirely driven by resource extraction and roughly 40 percent of the Russian government’s budget revenue comes from oil sales. Decreasing the price of oil to somewhere below the range of $85 to $93 per barrel would severely inhibit Russia’s ability to fund its government, destabilize its economy and energize its oligarchs to pressure Putin.

Already there is evidence that Russia’s invasion has actually increased oil prices slightly, but the U.S. could send prices lower through some short-term steps, including immediately ending the ban on exports of U.S. crude oil; tapping into the strategic petroleum reserve, and convincing other allies such as Germany to do the same with their reserves; enlisting Saudi Arabia, Nigeria, Iraq, Mexico and Canada in temporarily increasing petroleum production; and assisting Japan in bringing its 50 idle nuclear power plants back online sooner, and convincing Germany to temporarily delay its decision to close all of its nuclear power plants by 2022.

The U.S. and its allies also should freeze the assets of Russia’s top federal and regional political leaders, oligarchs and military officials that, in conjunction with travel restrictions, would make the pain they seek to impose far more acute.

Additionally, the United States ought to immediately announce a five-year pause in any reductions to the U.S. military presence in Europe, change the periodic, rotational presence of U.S. Air Force assets in Poland to a permanent one and double the U.S. force currently performing the air policing mission over Estonia, Latvia and Lithuania, from four F-15s to eight. Such steps would signal to Moscow the West’s grave concern over Russia’s invasion, reassure U.S. allies that Washington takes the security concerns of its newest NATO allies very seriously and remind all parties that stability and security in Europe remains a vital U.S. interest.

If the U.S. is serious about reversing the Russian invasion, versus tolerating it, the Obama administration needs to become more comfortable with playing Russia’s zero-sum game. Doing so begins with using energy as a weapon, as Putin has in the past, and leveraging Russia’s dependence on a high and stable price of oil.