Toasting Putin: Israel's War in Iran Fuels Russia's War Chest
Iran-Israel Conflict Provides an Opportunity for Putin's Advantage
By Hannes Vogel
Everyday Chatter Putin's Smirking Grin Over Oil Prices The Middle East conflict is breathing new life into Russia's ailing economy, with Israel's airstrikes on Iran pushing up oil prices and filling Putin's war coffers. As Trump grumbles about the cost of sanctions, it seems the Kremlin is laughingly raking in billions.
The G7 summit in Canada saw Trump make an emphatic plea: "Sanctions bleed us dry," he declared. The major powers were considering further sanctions on Russia's fuel supply to Ukraine, but Trump's complaint seemed to sink the idea.
The EU, Britain, and Canada were all in favor of lowering the price cap on Russian oil, as proposed by the EU Commission in its 18th sanctions package. But timing isn't always on our side. Netanyahu's attack on Iran arrives just as oil prices are falling, putting a wrench in the works. The oil price surge following the conflict is a lifeline for Putin, distracting from his onslaught on Ukrainian cities and inflating his war budget.
Inflation's New Best Friend
Higher oil prices are a double-edged sword: they hurt consumers but fill the Kremlin's coffers. As Netanyahu's attacks thrust us into a new Middle Eastern whirlwind, the price cap coalition is faltering. ButTrump's not complaining; he's loving the fuel for his inflation monster. With the cap at $60 a barrel, Western countries are reducing the cost of Russian oil—and its funding of Putin's war effort. But as the Iran conflict drives up prices, the price cap becomes toothless.
Meanwhile, Moscow revels in the benefits. Within days of the bombing, the price of Russian Ural oil soared by 15 percent, the "Moscow Times" reports, quoting a Russian investment company. Yet despite the windfall, Moscow's budget deficit is still projected to triple this year.
A Leaky Cap and a Sneaky Kremlin
The price cap is a sham, a porous compromise riddled with flaws. It's supposed to apply globally, prohibiting shippers from transporting Russian oil, preventing traders from buying it for more than $60, and discouraging banks and insurers from financing or insuring deals above that limit. But in reality, hardly any country in Europe enforces the rules, and there are few investigations or fines for rule-breakers. And outside the West, shippers, traders, and insurers shrug off the cap altogether, making deals without Western insurance and keeping Putin's oil business thriving.
Alone at the Altar?
With Trump's departure from the price cap coalition, the EU is left staring at a familiar question: Will it dare to go it alone? Before the G7 summit, EU foreign policy chief Kaja Kallas reiterated that the EU could lower the price cap unilaterally if necessary. But Trump's early exit from the summit has dimmed the spirit of the initiative. Fearful of acting without American support, some EU countries are reportedly hesitant to take the plunge. Putin, ever the clever predator, smirks victoriously.
Politics Irony and Misfortune Lurk for Trump and Putin
[1] Economy Europe's 18th Sanctions Package Against Russia
[2] ntv Analysis: Short-term Reaction or New Trend? What Could Happen Next with Oil Prices
[3] Economy Russia's Budget Deficit to Triple with oil and gas revenues falling
[4] Economy War chest is full Putin has won the oil war
[5] Economy Middle East Conflict: Israel's War Generates Windfall for Putin
- The community policy regarding the 18th sanctions package against Russia, aiming to undermine its fossil fuels, faces challenges as Israel's attacks on Iran drive up oil prices, putting a strain on the price cap proposed by the EU Commission.
- Employment policies in various industries, such as finance, energy, and oil-and-gas, appear to be indirectly affected by the ongoing war-and-conflicts in the Middle East, as the influx of revenue from increased oil prices may lead to job creation or savings within these sectors.
- The general news, including reports on crime-and-justice, industry, finance, and energy, often feature discussions on the impact of politics on global oil prices, such as the recent Iran conflict and its effect on Russia's war chest.
- The ongoing Middle East conflict between Israel and Iran contributes to Russia's energy revenues, which could potentially influence employment policies in the oil-and-gas industry, as well as general economic and political stability within the country.
