EU, US Will Not Be Able To Impose Meaningful Sanctions On Russia
BAC, MS, GS
Russia’s leader, Vladimir Putin, has control over $160-B in Crude Oil and Nat Gas exports, and this fact is likely be his most potent weapon in Russia’s face-off with the US and Europe over the Ukraine.
As Crimea prepares to vote Sunday on whether to return to Russian, the US and its European allies have few ways to keep Mr. Putin’s from his goals.
Threats of visa bans and asset freezes have not detered the Kremlin, 6 hrs of face-to-face talks between the top US and Russian diplomats ended Friday without a deal.
Russia is the world’s largest Crude Oil producer, exported $160-B worth of hydro-carbon based industrial feedstocks to Europe and the US in Y 2012.
While shutting the flow of Russian energy exports would starve the Moscow government of essential flows of foreign cash, the price may be too high for European consumers and it may not alter Mr. Putin’s plans.
German Chancellor Angela Merkel, leader of the EU’s biggest economy, said Friday her nation is prepared to bear the economic pain that would accompany Russian retaliation to any sanctions.
Analysts from Goldman Sachs Group Inc.(NYSE:GS), Bank of America Corp.(NYSE:BAC) and Morgan Stanley (NYSE:MS) said Europe probably will not back sanctions that limit flows of Russia’s Crude Oil and Nat Gas.
European members of the Paris-based International Energy Agency (IEA) imported 32% of their raw Crude Oil, Fuels and Nat Gas-based chemical feedstocks from Russia in Y 2012.
All togethere the EU, Turkey, Norway, Switzerland and the Balkan countries got 30% of the Nat Gas they burned from Russia in Y 2013, much of it pumped through pipelines that cross the Ukraine, that according to the US Energy Department in Washington, DC.
Strategic analysts say that giving up Russian Crude Oill and Nat Gas would be “off the table” for Europe.
Europe risks a replay of its failed attempt 6 yrs ago to punish the Mr. Putin for going to war with the Republic of Georgia, when it was unable to impose sanctions after acknowledging its dependence on Russian energy.
Crimea was a dominion of Russia and then the Soviet Union for more than 200 yrs before the Communist empire collapsed in Y 1991. It votes today, Sunday 16 March on whether to break away from Ukraine. The plebiscite was called after a popular uprising forced Russian-backed President Viktor Yanukovych to flee the Ukrainian capital of Kiev last month.
Ukraine’s central government said Russia already has taken control of the Crimean Peninsula, and has massed troops along the border.
Russia’s Foreign Minister Sergei Lavrov said Friday that his country has no plans to invade Eastern Ukraine.
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