The ExxonMobil Russia-Rosneft Partnership vs. Obama’s Sanctions Regime against Russia

[boilermaker55]

Does this article and the situation between the USA and Russia with what is happening now with the Ukraine and Crimea give any a reason to pause and reflect?


In a long-awaited moment in a hotly contested zone currently occupied by the Russian military, Ukraine’s citizens living in the peninsula of Crimea voted overwhelmingly to become part of Russia.

Responding to the referendum, President Barack Obama and numerous U.S. officials rejected the results out of hand and the Obama Administration has confirmed he will authorize economic sanctions against high-ranking Russian officials.

“As I told President Putin yesterday, the referendum in Crimea was a clear violation of Ukrainian constitutions and international law and it will not be recognized by the international community,” Obama said in a press briefing. “Today I am announcing a series of measures that will continue to increase the cost on Russia and those responsible for what is happening in Ukraine.”
But even before the vote and issuing of sanctions, numerous key U.S. officials hyped the need to expedite U.S. oil and gas exports to fend off Europe’s reliance on importing Russia’s gas bounty. In short, gas obtained via hydraulic fracturing (“fracking”) is increasingly seen as a “geopolitical tool” for U.S. power-brokers, as The New York Times explained.
The ExxonMobil Russia-Rosneft Partnership vs. Obama?s Sanctions Regime against Russia? | Global Research

 

[waltky]

Granny says, "Dat's right - Obama's all talk an' no sanctions...

Day 25 Since Obama Authorized Additional Sanctions Against Russia, but Still No Action
April 14, 2014 – President Obama on March 20 signed an executive order authorizing sanctions targeting sectors of the Russian economy, but since then, administration officials have done nothing more than repeatedly warn that such measures will be imposed unless Moscow changes course.

Although the warnings have gone unheeded by the Kremlin, the administration has yet to take action. After a second consecutive weekend of pro-Russian demonstrations and seizures of government facilities in eastern Ukraine, the State Department alleged Sunday that “Russia is now using the same tactics that it used in Crimea in order to foment separatism, undermine Ukrainian sovereignty, and exercise control over its neighbor.” Below is a timeline of the warnings from Obama and various administration officials relating to the so-called “sectoral” sanctions” facing Russia, in the 25 days since the executive order was signed:

President Obama, March 20:

“[T]he world is watching with grave concern as Russia has positioned its military in a way that could lead to further incursions into southern and eastern Ukraine. For this reason, we’ve been working closely with our European partners to develop more severe actions that could be taken if Russia continues to escalate the situation. As part of that process, I signed a new executive order today that gives us the authority to impose sanctions not just on individuals but on key sectors of the Russian economy.”

National security advisor Susan Rice, March 21:

“[T]he executive order that President Obama signed yesterday … gives us the ability as needed to target particular sectors to be designated within the Russian economy, should the circumstances necessitate.”

State Department spokeswoman Marie Harf, March 24:

“[In a meeting with Russian Foreign Minister Sergei Lavrov, Secretary of State John Kerry] pointed to the sanctions announced last week and the new executive order signed by President Obama that provides the flexibility to sanction specific industries if Russia continues to take escalatory steps.”

Obama, in a speech in Brussels, March 26:

See also:

Talk, Not Action: Administration Again Warns Russia of ‘Sectoral’ Sanctions
April 13, 2014 – With Ukraine hovering on the brink of open conflict allegedly instigated by Russian agents, U.S. Ambassador to the U.N. Samantha Power said Sunday that sanctions targeting sectors of the Russian economy “could be on the table.”

Administration officials have made similar warnings more than a dozen times since President Obama signed an executive order 25 days ago, providing the authority for such “sectoral” sanctions. Although officials continues to accuse Russian of an escalating campaign of provocation, those sanctions remain in the arsenal, unused. This weekend saw a serious rise in tensions in eastern Ukraine, with pro-Moscow demonstrators accompanied by gunmen, allegedly Russian special forces agents, seizing and occupying government buildings. There were reports of gunfire in some areas and of injuries and at least one death.

The State Department on Sunday evening described the events as “a coordinated and professional operation conducted in six cities in eastern Ukraine.” “The events of April 12 strongly suggest that in eastern Ukraine Russia is now using the same tactics that it used in Crimea in order to foment separatism, undermine Ukrainian sovereignty, and exercise control over its neighbor in contravention of Russia’s obligations under international law,” it said. Ukraine’s interim president, Aleksandr Turchinov, set a Monday morning deadline for rebels to evacuate the occupied government facilities or face what he described as an anti-terrorist operation. Russia in turn called for an emergency U.N. Security Council meeting on Sunday night, claiming that the interim administration in Kiev – which Moscow does not recognize – is instigating a civil war.

Hours before the Security Council was due to meet, Power said that the latest events in Ukraine bore “the telltale signs of Moscow's involvement” and “the telltale signs of what we saw in Crimea.” Appearing on ABC’s This Week, the ambassador to the U.N. said that a package of sanctions imposed by the U.S. last month – visa bans and asset freezes on senior Russian figures and sanctions against a key bank – have already had an impact on the Russian stock market and currency. And she raised, yet again, the scepter of sectoral sanctions. “The president has made clear that depending on Russian behavior, sectoral sanctions against energy, banking, mining could be on the table,” she said. “If actions like the kind that we've seen over the last few days continue, you're going to see a ramping up of those sanctions.”

Since Obama on March 20 signed the authority for those sanctions, Russia has incorporated Crimea into the Russian Federation, stormed military bases there, amassed tens of thousands of troops near the border with Ukraine while insisting they were there for exercises, and has instigated over the last two weekends pro-Russia protests and building seizures in a number of cities in eastern Ukraine. Power’s invoking of the sectoral sanctions possibility was the latest in a string of similar statements by administration officials, from the president down, since the executive order was signed.

Talk, Not Action: Administration Again Warns Russia of ?Sectoral? Sanctions | CNS News

 

[Moon968]

This is very interesting battle.

 

[waltky]

Dis gonna hurt you more dan it gonna hurt me...

Why Sanctions Will Cost Russia More Than America
April 16, 2014 ~ Secretary of State John Kerry warns that with U.S. giants like ExxonMobil and Coca-Cola investing or earning billions of dollars in Russia, imposing sanctions on Russian banking, energy, mining, arms and other industries will affect the American economy

When Secretary of State John Kerry meets with his Russian counterpart in Geneva on Thursday to discuss Russia’s incursions into eastern Ukraine, his trump card will be the threat of wide-ranging sector sanctions, the most serious response leveled by the Obama Administration. And while Kerry has argued that imposing sanctions on Russian banking, energy, mining, arms and other industries would have a “profound impact” on the country’s economy, he has also said sanctions could have economic effects back home. “If you start going down that road,” he told a Senate committee panel last week, “it’s not just them who feel it, we’ll feel it too.”

Calculating the potential impact of sanctions on Russia’s behavior vs. the cost borne by the American economy is now an important part of Washington’s decisionmaking over how to manage the Ukrainian crisis. American business interests are concerned about the cost of sanctions. Some name-brand U.S. giants like ExxonMobil, Coca-Cola, Pepsi and General Motors invest or earn billions of dollars in Russia, as the New Republic recently noted. “The U.S. business community recognizes the seriousness of the situation in Ukraine as well as the damage to the global economy that sanctions could inadvertently unleash,” says Myron Brilliant, head of international affairs at the U.S. Chamber of Commerce. “The chamber urges policymakers to continue to gauge carefully the impact sanctions could have on already disappointing economic growth in a number of key markets as they chart a path forward,” Brilliant says.

But hawks at the U.S. State Department see the cost of wide-reaching sanctions as comparatively small next to America’s global business activity. U.S. exports to Russia totaled $11.2 billion in 2011, according to the Observatory of Economic Complexity, while Russian exports to the U.S. totaled $26.4 billion. Because those exports represent a larger part of Russia’s overall economy, Moscow would be hurt more than the U.S. in a trade war: Russia’s total exports in 2011 were $508 billion, compared with $1.37 trillion for the U.S. Last month alone, the U.S. exported over $190 billion worth of goods. “The fundamental thing is that Russia’s GDP is 2.9% of global GDP, and U.S. trade with Russia is about 1% of total U.S. trade,” says Anders Aslund, a Russian specialist at the Peterson Institute for International Economics. “In the big scheme of things, Russia’s economy doesn’t much matter,” he adds.

For their part, U.S. businesses say billions of dollars in lost trade is too much to pay for an uncertain result. They say American sanctions would have a limited impact on the Russian economy and prefer the State Department to work with the European Union, which has much closer ties to Russia. Unilateral sanctions, says Brilliant, would “certainly be ineffective.” But unilateral sanctions are likely all that is available, for now. There is bipartisan support for sector sanctions on the Senate Foreign Relations Committee, including from ranking Republican Bob Corker of Tennessee and members Republican Senator Marco Rubio of Florida and Democratic Senator Chris Murphy of Connecticut. But the E.U. is hesitant to move forward with harsher sanctions.

If the U.S. does go it alone, the most powerful sanctions could be financial, increasing the cost of capital for Russian companies even without the support of the Europeans. If the U.S. targets the top four state-run Russian banks, says Aslund, the E.U. could even benefit economically and the U.S. could significantly hurt the Russian economy. “If Russian finances are being hit, which I favor, then the money would flow out of Russia,” says Aslund. Russia’s GDP would decline by “several” percentage points, he argues, but he acknowledges he isn’t sure if it would “halt” Putin’s aggression.

For now, the betting is mixed on whether the State Department will go ahead with energy-sector sanctions, which are particularly important since a major source of Russia’s wealth comes from what it extracts from the ground. Edward Chow, an international energy expert at the Center for Strategic and International Studies, says the State Department is “getting much closer” to announcing such measures, thanks to the deteriorating conditions in eastern Ukraine. “It will be more symbolic than hurt in the very short run, but it’s not completely negligible,” says Chow. Aslund says “nobody” is arguing for oil sanctions but leaves open the possibility of natural gas sanctions.

Sanctions on Russia Would Be Felt in U.S. Too - TIME