They’ve Got It Wrong AGAIN!

“Fight Against Stupidity And Bureaucracy”

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The Sunday Sermon

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russia-sanctions

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I wrote a short post the other day on the subject of failure. I think it was a success 🙂

What hasn’t been a success, however, is America’s foreign policy. I’ve also written about this many times in the past. I find it very annoying that a country as great as America and with so many brilliant people within it can neither elect a smart politician, or even a not so smart politician but one who has enough brains to hire smart advisers.

The current President, Barack Obama, has continued the trend of failure. Particularly with regard to foreign policy, at which he has not only failed but added indecision and procrastination to the mix.

The examples are many, but the latest foreign policy debacle is the leading role America has taken in the imposition of sanctions against Russia. Sanctions that may have been aimed against Russia but which are already starting to backfire against the US.

I noted in another post that sanctions have been imposed in regard to Russian oil and natural gas, which Europe (particularly Germany and France) needs, but America doesn’t; but that the sanctions were not imposed on nuclear fuels, which America does need.

Believe me, the hypocrisy of that has not been lost on the European governments or its public.

And the hypocrisy does not end there.

rosneft getty

On the one hand there have been hyped up media statements telling everyone that Rosneft, Russia’s largest oil company, and its head Igor Sechin, have been targeted in the sanctions.

But what hasn’t been trumpeted so loudly is the fact that British oil company BP, owns almost 20% of Rosneft, and has confirmed that it would not be severing ties with the Russian firm.

Similarly, Norway’s Statoil is continuing its partnership with Rosneft to search for oil in the Norwegian section of the Barents Sea.

And France’s major oil and gas company, Total, has announced that it is seeking financing for its next gas project in –  where else? –  Russia. When they get that financing, amounting to something in the region of $27 billion, it will be in Roubles or maybe even Yuan, but certainly not in US dollars – again thanks to the ill thought out sanctions.

This will set a trend for similar deals that will also exclude the US dollar, inevitably lowering its standing as the world’s reserve currency. I expect more such deals to be done with the Russians by German companies in particular as the sanctions fail to bring the promised results and as a consequence start to fall apart.

But it gets worse.

Before any of the US Senators or Congressmen stand up and start to call names at the Brits or the Norwegians or the French for backtracking on sanctions, they would be better to take a look nearer home.

It now seems that American Companies are not paying attention to the sanctions either.

ExxonMobil_Challenges

For example, ExxonMobil, America’s largest oil company, has continued drilling offshore in the Russian Arctic, also with Rozneft.

If the sanctions were anything more than a bit of public posturing by Obama, ExxonMobil shouldn’t (and wouldn’t) be doing any more work with the Russians in Russia. But using the excuse that it is environmentally safer to complete the well than to allow the Russians to do it alone, ExxonMobil got permission to continue.

No doubt the company will express its gratitude when the next round of electioneering fund raising comes along! (Gosh, I’m such a cynic!)

Now, if Obama and his advisers had thought for a moment about the consequences of sanctions, they would have realized that, in cases like this, companies such as ExxonMobile had not really got a choice. If they hadn’t continued to work with Rozneft, the Russian company would simply have gone ahead without them with a consequent dilution of ExxonMobile’s return if/when the well is a success.

In addition to that, if the Russian company did need other help you can be sure there would have been a Chinese energy company there ready and willing and eager to take up the slack.

Whilst Obama and his predecessors have been blundering around the world pissing off friend and foe alike, the strategy of the Russian President has been to cultivate new friends and thereby new markets and customers for his country’s vast energy reserves.

It has been a clever move.

Sanctions or not, game to Putin this time I think.

sanctions against Russia

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