Things are deteriorating quickly when it comes to the situation between Russia and Ukraine. As we previously reported, the U.S. ordered the families of diplomats out of Ukraine on Monday. Non-essential employees can leave voluntarily. But other Americans are out of luck, they can just figure out their own way home. There are no plans to evacuate any of the thousands of Americans currently in Ukraine. Joe Biden is also considering sending thousands of troops, equipment, and aircraft to Eastern Europe to provide more protection to the Baltic states and to ward off Russian aggression against Ukraine. The U.S. just placed 8500 troops on alert and reports were that he could send as many as 50,000 “if needed” to the NATO allies. My colleague Dennis Santiago wrote more on that deployment and risk assessment earlier.
So how have we gotten to this point and what kind of an impact could it have on the U.S. if there is a war between Russia and Ukraine? What is our responsibility if any in all of this?
It’s been a long line of bad moves, starting with Barack Obama being instrumental as a senator in convincing the Ukrainians to get rid of their conventional weapons on the promise we would be there to help if they were ever threatened. Not only did that leave Ukraine naked, but we paid to get rid of their weapons. Now we’re having to pay to provide them with weapons for their defense. Putin found out that Obama was an empty suit and had no effective response but to fumfer around when Putin went into Crimea. Is it any wonder that he would think that Obama’s Vice-President would be cut from the same cloth?
When Biden came in, what did he do? He immediately helped Putin’s energy position by cutting the Keystone XL Pipeline and stopping other drilling projects, in addition to attacking the energy industry generally. Meanwhile, Biden went against all previous U.S. positions, including his own, in waiving sanctions on the Nord Stream 2 pipeline. Not only did he do that, but he leaned on Ukraine to not voice their opposition to the move, but they refused and went public with their opposition because they knew where it could lead. And here we are. So while cutting our energy ability, he immeasurably increased and empowered Russia while hurting Ukraine.
But that wasn’t all. How many Americans know that we are importing a lot of oil from Russia? Not only did Biden beg OPEC to produce more oil, he doubled the amount of oil imported from Saudi Arabia from December of 2020 and October of 2021 and we’ve also tripled the oil from Russia from what we were importing from February 2019 to September 2021. In May of last year, Biden surged the Russian oil imports by 23 percent to 844,000 barrels a day from the prior month, which was almost 10 percent of all our oil imports for the month. The only country we import more oil from is Canada. Exactly why are we importing and dependant on such an adversary?
Then, most recently, Biden emboldened Putin with his latest remarks about a “minor incursion,” but his remarks also revealed differences in approach within NATO. He even said Russia would ultimately win such a conflict with Ukraine. Biden also showed incredible weakness and incompetence in Afghanistan, so Putin knows he’s dealing with someone who is even weaker than Obama if that’s possible.
Biden had already telegraphed that he wouldn’t stand to defend Ukraine in December. Biden said that he would not unilaterally be putting U.S. boots on the ground in Ukraine. Now, most don’t want to have a war in Ukraine or have a military presence there. But when you completely foreclose the possibility of any military response as Biden effectively did in December, you remove any possible deterrence. Putin doesn’t want a war with us either. But now, because of Biden, Putin knows he has nothing to fear from the U.S. in that regard. He may have rightly believed it before, but then Biden said it outright. Biden even spoke about seeking an “accommodation” with Russia, yet another sign of weakness.
So that wasn’t just one green light but a series of green lights.
Because of all the mistakes, Biden has helped to further destabilize the situation. Now he’s trying to right it by rushing in troops to the NATO allies, to reassure them. While that might reassure them and while it might be viewed as a strong move, it also is likely to set Putin off even more to have more U.S. troops nearby. Now, he may feel he has to check that, so you get new reports of Russian Navy warships on the move being pushed by RT, another effort to destabilize the situation.
If Russia invades Ukraine, one of the likely things that would be hit would be gas prices because it would likely affect our supplies from them as well as their importing through Ukraine.
So expect gas prices to increase even more than they have already. Even CNN notes that oil prices have already shot up to seven-year highs in recent days, likely impacted already, just because of the concerns. And when it hits energy, that’s going to ripple out and hit everything else that depends on it. It could make the inflation we think we’re feeling now so much worse.