Rory Johnston explains why the US can’t use liquified natural gas exports to undercut Russia in Europe:
Most of the natural gas that could potentially head for Europe is already committed in long-term supply contracts. … Furthermore, most of those contracts are in Asia, where natural gas prices are higher than in Europe. The United States does not sell natural gas, nor does Europe buy it; commercial entities do, and these companies are not going to voluntarily lose money in order to advance American interests. As Michael Levi explains, the U.S. government “can create a framework in which commercial entities can sell gas, but after that, it’s up to those businesses to decide where the gas goes.”
Meghan O’Sullivan suggests US oil production could hit Russia harder and faster:
Russia’s real vulnerability lies in the price of oil, not in the realm of gas.
Revenue from gas sales abroad make up 8 percent to 9 percent of the Russian budget, while oil revenue accounts for a much heftier 37 percent to 38 percent. It was not that long ago that a prolonged collapse in the price of oil undermined the foundations of the Soviet Union, according to former Deputy Prime Minister Yegor Gaidar. The U.S., by adding 2.5 million barrels of oil to global markets in the last three years, has prevented the price of oil from edging higher in the face of disruptions in Libya, Iran and elsewhere. Should the U.S. continue to increase its oil production, as is widely assumed, it could create pressure to further lower the price.
It would not take a huge price collapse to harm Putin’s regime; already, the Russian economy is struggling, and the government has made across-the-board cuts. Plus, Putin’s power comes in large measure from extensive patronage networks made possible by high oil prices. To balance its budget, Russia needs oil prices of about $110 (the current price is about $108). A further dip in oil prices is the largest challenge on the horizon to Putin.
Matt Steinglass calls a time-out:
The idea that America can defeat Russian irredentism in Eastern Europe by deregulating its own energy industries is frankly ridiculous. Deregulation can make airline tickets cheaper. It cannot stop the Russian army. Energy-industry deregulation has become part of the standard Republican line on Crimea largely because of the relentless self-congratulatory process by which political actors cement their followers’ ideological convictions. Leaders apply such flattery like a soothing unguent, assuring their backers that the things they already believe in would have solved every imaginable problem in advance, if only the foolish opposition had gone along. This helps fuse ideological blocs into coherent, hard-to-dent juggernauts.