“ Again, at what price?”
Again, at high price.
Hundreds of millions, perhaps billions of people will be made poorer because of the brutal aggression and atrocities of Putin and his willing accomplices. Surrendering to that would be disgracefully cowardly, and only invite more such aggression.
Putin did this. He is a monster who must be defeated, whatever the cost.
Again, the bottom line is that the industrial democracies have knowingly accepted to pay the costs, approved by their legislatures with overwhelming bi-partisan support. Russia is screwed.
“Oil and gas are global commodities. China and India are becoming alternate markets for Russian energy”
Of the gas that went to Europe last year (then 85% of Russia’s gas exports), only 4% can be physically shipped to other customers. If China’s 7% of last year’s volume doubles, that is small consolation. Many years and massive investment would be needed to develop Eastern fields or pipelines thousands of miles long, to bring much more than that to Chinese market. But Russia is now cut off from the capital markets and technology to do it. Russia is screwed.
Russia has inherently higher oil production and transportation costs (the highest of any major producer), and now it’s higher transaction costs under sanctions, make Russian oil even less competitive in a commodity market. That is why it’s sales to India just came to a dead halt.
https://oilprice.com/Energy/Crude-Oil/Why-India-Is-Suddenly-Buying-Less-Russian-Crude.html
Russia’s normally weak competitive position in the oil market, is made significantly weaker by the added expenses of current sanctions, but stronger secondary sanctions are coming in December, if not sooner, because of the mobilization escalation. Global recession is coming fast and hard. On an objective price basis, Russia will absorb the lion’s share of the drop in demand.
Russian oil exports made up about 7% of last year’s global oil export volume. Recessions typically reduce global demand 5-15%. This one looks like it will be a bad one, based on the energy shock, and the harshest Central Bank tightening in a half century. Swing producer Russia is so screwed. Like once in a century screwed.
Putin did that.
Insane. Ukraine is not the hill to die on. The global economy is in recession headed towards a possible depression. European economies are headed into the toilet along with ours.
Putin isn't the existential threat to the US and our allies. China is. We are spending billions of dollars of borrowed money in endless wars. The US is the world's biggest debtor nation by far. The only reason that we can print money to cover deficit spending is because the USD is the world's reserve currency. That will be the biggest casualty of the war in Ukraine.
Great empires fall from within. When asked what the greatest threat was to American security, Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, said. "Our national debt is our biggest national security threat."
In late May, the Congressional Budget Office (CBO) projected that annual net interest costs would total $399 billion in 2022 and nearly triple over the upcoming decade, soaring from $442 billion to $1.2 trillion and summing to $8.1 trillion over that period. However, if inflation is higher than CBO’s projections and if the Fed raises interest rates by larger amounts than the agency projected, such costs may rise even faster than anticipated.
The growth in interest costs presents a significant challenge in the long-term as well. According to CBO’s projections, interest payments would total around $66 trillion over the next 30 years and would take up nearly 40 percent of all federal revenues by 2052. Interest costs would also become the largest “program” over the next few decades — surpassing defense spending in 2029, Medicare in 2046, and Social Security in 2049.
Ballooning interest costs threaten to crowd out important public investments that can fuel economic growth in the future. CBO estimates that by 2052, interest costs are projected to be nearly three times what the federal government has historically spent on R&D, nondefense infrastructure, and education, combined.