May 15, 2014 | Quote

Energy Sanctions Aim to Hurt Russia More Than the West

As the US looks for levers to exert influence over Russia, energy is an obvious choice. Oil and gas generate more than 50 per cent of Russian federal government revenues, and Rosneft and Gazprom, the country’s two largest energy companies, are both state controlled.

The problem is that energy binds Russia to the rest of the world in a codependent relationship. Consumers – especially in Europe – need Russian oil and gas as much as Russia needs the revenue they bring in.

The energy sanctions being proposed by the US are intended to circumvent that obstacle.

The US is seeking support from European countries for its plan, but that may not be necessary. Mark Dubowitz of the Foundation for Defense of Democracies points out that when the administration began tightening restrictions on Iran in 2010, “secondary sanctions” were effective in persuading non-US companies to stop doing business there.