Nataly Lutsenko at Kanal24 TV in Kyiv, invited me again to an interview. We discussed, in detail, what I see as “the oil war” jointly waged by Ukraine and the USA against Russia. Each has its role:
(i) Ukraine is waging an air campaign with drones and missiles against Russian refineries, oil export terminal ports, and oil tankers. This is an audacious and expanding campaign seriously impeding Russian capacity to handle export of the oil its fields produce.
It is important to note, politically, that these attacks are assisted by USA intelligence, as reported in October by the FT. Ukraine’s intelligence chief also spoke of Ukraine’s crucial dependence on US intelligence assets on 20 December, and later on the depth. Unlike the former “oil price cap” strategy of the Biden administration and the early months of the second-Trump administration, the present, much expanded air war on Russian oil is now clearly embraced by the USA.
(ii) For its part, the USA’s role in this oil-war – along with NATO, UK, EU and G7 allies – involves increasingly harsh tariffs and sanctions against Russian oil exports.
As I have pointed out for some months, these two aspects — (i) and (ii) above — should be seen as ONE overall campaign, as ONE coordinated, allied offensive against Russian oil exports. No campaign of this sort has been implemented against a Great Power since WWII. It’s immediate aim is to offset the advantages Putin’s Russia has, to various degrees, on the battlefield, in manpower, rocketry and finance, so as to coerce Putin to negotiate seriously.
On the USA side, this oil offensive has been escalated at the times Putin has rejected a peace deal, or in order to get him to the table.
On the Ukrainian side, it has constantly been escalated as its air-strike capacities have improved.
As I explained to Nataly in our interview, the USA now has two options in hand to escalate this oil war if/when Putin does not respond in a favorable direction to the set of 20 points for peace that were recently presented to the Russian side after being developed jointly between the USA, Ukraine and the EU.
One of these two sanctions-and-tariffs options I termed the “nuclear option,” as it could severely impede Russia’s capacity to export the oil it pumps out of the ground in W. Siberia and elsewhere. Russia has been pushing oil out of its West-facing export terminal ports at 100% capacity for at least two months, and as of mid-December had 40% more oil loaded on ships since August – with many having no destination given the general glut in the market already.
– Aside –
Just for clarity, the 20 points were developed mainly in Berlin on 15 Dec, where key agreements were forged between the EU represented by the German Chancellor Merz, Zelensky and, for the USA Steve Witkoff and Jared Kushner. These 20 points aree the allies’ response to the Russian-friendly 28 points drawn up by Steve Witkoff and Kirill Dmitriev, the head of Russia’s direct investment fund, in Florida in late November.
The 20 points were then presented to the Russian side by the USA team in Florida last Saturday 20 December
– End Aside –
Whether Trump decides to impose one of these two new oil sanctions options depends on whether he judges Putin’s response to the allies’ 20 points as reasonable and productive.
If Putin is seen by Trump as not seriously engaging, the only option Trump will have, once again, is to inflict more “pain”, as he has termed it, on Putin.
I explained that the two new oil-sanctions options Trump has available include:
1) A set of new sanctions the US government – i.e., OFAC in the Treasury Department and others – have drawn up, ready to be imposed on Russian “shadow fleet” tankers, on cooperating oil traders and others. EU ambassadors to the US were briefed on these sanctions by Treasury Secretary Scott Bessent early in the week of 15 December, and ..-
2) What I termed in the Kanal24 interview as “the nuclear option.” This is the bill that has been held up in Congress since 3 June, when Senators Lindsey Graham (Republican, So. Carolina) and Richard Blumenthal (Democrat, Conn.) introduced it with support of 83 senators. The two sponsors recently said support is now at 92 out of 100 senators.
Trump promised to sign this bill, just before the present round of negotiations began, if Congress passed it and put it on his desk. In reality, the Senate majority leader, Republican Senator Thune, has to first allow the bill to be brought to the floor for a vote for it to end up on Trump’s desk. And, so far he has held it up awaiting White House (Trump’s) approval. In turn, Trump is waiting to see now Putin responds in the present round of negotiations.
This bill would impose 500% tariffs on countries Russian energy, with exceptions only for counties that provide material support to Ukraine to defend itself against Russia. The authors call these “bone-crushing” and “draconian” sanctions.
This Christmas week, Graham advocated seizing Russian “shadow fleet” ships at sea and giving Ukraine Tomahawk missiles if Putin rejects the present peace process. He also told Trump that Putin is “like Lucy with the football.” In the Charlie Brown comic strip, Lucy famously grabs away the football every time Charlie runs forward and starts to kick it, causing Charlie to flip over and fall every time. So Putin, like Lucy, tears up the peace deal every time Trump presents one. What Graham didn’t explicitly spell out, however, is that Trump is obviously Charlie Brown. Graham is saying that Trump falls for this Lucy-like Putin trick time-and-again, and time-and-again lands on his butt.)
So, it is now time for Trump to decide.
In the interview, I described in outline how, from a technical perspective, the Russian West Siberian fields are threatened with ruin in the cold of winter if sufficient Russian oil exports are suddenly blocked from exiting via Russian ports. If done extensively and suddenly enough, his can cause the enormous Druzhba pipeline network to back up, forcing Moscow to rapidly and chaotically shut off the ole, delicate West Siberian old fields that provide the vast majority of Russian oil. There would be no choice as Russia has no significant oil storage capacity.
If shut chaotically in deep winter, they might never come back online anywhere near their present capacities. This would severely undermine Russian capacities to finance its Ukraine war and to subvert and threaten other formerly Soviet-dominated states. This is exactly the senators’ aim, as I explained. These and other senators frequently refer to Russia as “a gas station masquerading as a state,” quoting the late Sen. John McCain, to emphasize how oil rents enable its aggressions.
The Global Barrel 