The ceiling of the Old World – Vedomosti

US Treasury Secretary Janet Yellen recently praised her colleagues in the G7 for imposing a price ceiling on Russian oil products supplied by sea. As the main ideologue of limiting the cost of raw materials from Russia, she emphasized the effectiveness of the measures taken to achieve two goals – reducing Russia’s income and maintaining the stability of the energy market. Referring to some Russian officials, Yellen argues that what is happening (apparently, the price ceiling for Russian “marine” oil has already entered into force) “glooms over the already unfavorable financial prospects for the Kremlin.”

The numbers say otherwise. Oil and gas revenues of the Russian budget at the end of 2022 increased, according to Deputy Prime Minister Alexander Novak, by 28%, production did not fall, but even increased by 2%. Therefore, Yellen is obviously disingenuous – its authors are clearly still far from achieving the first goal. But the second goal also raises questions. The imposition of cap prices on commodities by officials in Washington may at first glance seem like a simple way to solve the problems of the energy crisis. In fact, under the plausible pretext of concern for stability, the United States is trying to gain a foothold in the role of a single regulator of the world economy, appointing itself the very “invisible hand of the market” in order to divide this market in its own interests.

Yellen did not even remember the European allies in her congratulatory and gratitude speeches about the next stage of the “ceiling”. Although it is they who will now bear the main burden of responsibility for the decision made. The idea of ​​maintaining the stability of the system by simply removing a key player from it and redistributing its influence among other persons has often ended in the collapse of great schemers in world history. Especially when the initiators in reality cannot ensure this stability solely on their own.

For example, Napoleon III, the first president of the Second French Republic, “for the sake of stability in Europe” (and in fact – to restore the influence of his country on the world stage after the Napoleonic wars) in the middle of the 19th century actively engaged in solving the “Eastern Question” and helped the Western coalition temporarily remove Russia from influence on the continent. Years later, he himself suffered from the fact that there was no counterweight left in Europe, which Russia has always been: with its neutrality, Prussia defeated France, captured Napoleon and announced the creation of a single German state – the main rival of the French for decades to come.

It may seem to EU officials that by refusing Russian energy resources, they are making effective decisions as influential international actors. But this is self-deception, which leads to erroneous steps within a generally ineffective strategy for Europe to isolate Russia and force it out of the European economy. Like Napoleon III, having got involved in a completely unnecessary confrontation, European countries contribute to the strengthening of competitors, to which Russia did not belong. Rather, it was a natural (due to territorial proximity) trading partner of Europe – it supplied inexpensive energy resources, usually under long-term contracts, and purchased consumer goods.

Russia has found new sales markets – and the level of its oil and gas revenues proves this. But if earlier Russian raw materials stimulated the development of European industry, now it stimulates the economies of friendly countries. The stronger the pressure on Russia from the US and Europe, the more the influence of India and China will grow with the support of Russian energy resources – with their gigantic populations, growing economies and, by the way, nuclear weapons. They historically have experience of leadership: the states in their territories have already been the largest economies in the world, and China has been more than once. But most importantly, the EU missed the strengthening of its main competitor – the United States, left without a counterweight in the face of Russia.

Among the G7 countries that have pledged to keep the ceiling on prices for oil and oil products from Russia, only two have their own energy resources in sufficient quantities – the United States and Canada. The rest, with rare exceptions, are mainly importers. A coalition of exporters and importers simply by definition cannot have common goals, and therefore someone in it is clearly doomed to failure. And it’s definitely not the US. They began to replace Russia in the European market even before the introduction of the price ceiling. For 10 months of 2022, according to Eurostat, they supplied 42 million tons of oil to the EU countries against 31 million tons for the same period in 2021, that is, 35% more. Gas supplies from the US to Europe more than doubled – from 11.7 million tons in 10 months of 2021 to 25.7 million tons in January-October 2022, follows from the data of the same Eurostat.

In 2023, the United States will most likely fix the status of the main supplier of energy resources to Europe: the main thing is to give Europeans anesthesia more often – a mantra about stability and punishment of Russia, which allegedly violated this stability with its actions. In the meantime, brushing aside the timid attempts of opposition from the EU, the States will continue to lure advanced European industry to itself, promising all sorts of preferences. In addition, oil and oil products are not the only important commodities in world trade: once Washington has practiced them, no one will stop it from setting prices in any market, from grain to rare earth metals.