The United States unleashed some of its toughest actions against Russian President Vladimir Putin right after sending its troops to Ukraine. Polls in the United States show that people want Washington to do more. So what is left, financially, diplomatically and militarily, to increase the pressure?
The United States could achieve strong results from any number of next steps, according to current and former U.S. economists and officials. He could simply persist in pouring money and powerful weapons into Ukraine – a likely path. He could even pledge to end some of the Kremlin’s incursions into American political and financial systems, which is also conceivable.
But the most powerful trigger the West can now pull at Russia, many experts agree, is a gas pump. Cutting Russian profits from oil and natural gas sales has become a hot topic among world leaders looking at what else they can do to force Putin to end his invasion.
“It would be very helpful to try to find a way to reduce the proceeds of those sales and that’s really the real purpose, I think, of a ban,” U.S. Treasury Secretary Janet Yellen said Thursday during a of a meeting of world finance leaders.
“But if we can think of a way to do that without hurting the whole world because of rising energy prices, that would be ideal,” Yellen said.
President Joe Biden has already ended relatively minor US imports of Russian oil and other fossil products. But the United States would play a central role if the allies decided to reduce the global flow of Russian fuel and punish nations and companies that do not comply.
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Global purchases of Russian oil and gas production account for at least 40% of Moscow’s state revenue. Exports keep the Russian economy afloat despite the sanctions decreed so far and financing the war.
Cutting Russian oil further on the market would further aggravate the global supply shortage, raising prices for everyone, including the United States.
Republicans are already making gas price increases that stem in part from Russia’s war a major campaign point against Biden.
“Everyone wants a painless option, right?” asked Daniel Fried, former US Assistant Secretary of State for Europe, and one of many urging the United States to take tougher action as Russia builds up forces for a new phase of attacks in Ukraine . “Yes, they rarely exist.”
“If somebody writes, they can do that without effecting gas prices, you know, without taking a hit — you’re crazy, because you can’t,” Fried said.
The United States is already being asked to assure the world that American producers can help offset the loss of Russian supplies, should Europe decide to quickly cut the pipe on Russian oil purchases.
The United States would likely be an administrator and enforcer of any secondary sanctions aimed at penalizing China or other countries or companies if they buy or allow the Russian oil and gas industry.
European Commission President Ursula von der Leyen said European countries had considered diverting their payments for Russian oil and gas to escrow accounts, similar to the deals imposed on Iran and Iraq in the framework of sanctions.
A poll by The Associated Press and the NORC Center for Public Affairs Research found that more than half of those polled want Biden to be tougher on Putin.
In the United States, people may be beginning to accept that this could mean financial hardship for them. From 51% to 45%, AP-NORC poll respondents said the US should focus on sanctioning Russia as effectively as possible rather than limiting damage to the US economy.
But ask Alan Gold of Potomac, Maryland if he’s willing to pay more for gas as part of any global move to starve Russia of money for the war in Ukraine, and the answer you get is a growl. “I’m paying $5 a gallon now,” Gold said last week at a mall gas station, shaking his head as he watched the price soar as he pumped gas into his vehicle.
Elina Ribakova, deputy chief economist at the Institute of International Finance, said Russia’s war is driving up the price of its oil and gas, pushing Russia’s current account surplus to nearly $60 billion. dollars, a recent high despite all the Western sanctions.
Economists and policymakers must decide on next steps in the broader context of warring armies, nuclear war risks and the cost of Ukrainian lives, Ribakova said during an online panel with the Bendheim Center for Finance in Princeton last week. “That’s the cost we think of when we think of sanctions…not just the economy.”
Barring major changes, the financial arena is where the next major US actions against Russia will come from.
Militarily, the United States is unlikely to send many complex new weapons systems, such as tanks or American fighters or bombers. This would force Ukrainian fighters to train on unknown weapons when needed to fight, the Pentagon reasoned.
Instead, the US is expected to continue doing what it does militarily, but more so, pumping more money and basic weapons and resupplies into the battlefield. . On Thursday, Biden pledged an additional $1.3 billion for heavy artillery, 144,000 rounds and other aid.
Further strengthening US intelligence sharing to help Ukraine in the fight is one option.
On the diplomatic front, the United States and like-minded countries are exploring ways to further isolate Russia. Russia has already been suspended from the UN Human Rights Council and faces pressure on the world body’s educational, scientific and cultural organization to strip it of its UNESCO chairmanship and the prevent it from hosting a June meeting of its World Heritage Committee.
However, Russia is unlikely to be suspended from the International Civil Aviation Organization, the World Health Organization or the Food and Agriculture Organization of the United Nations. Any attempt to remove him from the most powerful group in the world body – the UN Security Council – would fail over a Russian and probably Chinese veto.
Talk of the United States officially designating Russia or Russian mercenaries as terrorists or supporters of terrorism has not gained traction.
There’s another big step the US and its Democratic allies should take that doesn’t get as much attention, argues Alex Finley, a former CIA operations directorate officer: clean up their own act.
“We have to look at our own role,” said Finley, who tracks Russian yacht seizures and other Western sanctions against Putin. She and others say lax regulation and enforcement in the West allowed Putin and Russia to influence US elections, funnel corrupt corporate money into shell companies and offshore tax havens, and to buy visas and passports for Western countries.
All of this serves to erode transparency and the rule of law in Western democracies, as Putin intended, Finley said.
The West got lax because “we made money off of it,” Finley said. “But we did it in a way that we sold… part of the soul of democracy.”
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