Vladimir Putin loves to talk nostalgically about the might of the former Soviet Union-and in annexing Crimea, he has taken a dramatic step toward re-creating it. But Russia’s strongman hasn’t read his history: In truth, the might of the Brezhnev-era USSR was built on high oil and gas prices.
When those prices began to fall in the 1980s—with more than a little help from Ronald Reagan’s White House—Soviet power crumbled with it. Now, a generation later, Western politicians are remembering that energy can be used as a geopolitical weapon.
Putin, it seems, is not the only leader who can play the game of History Repeating. “Putin looks strong now, but his Kremlin is built on the one thing in Russia he doesn’t control: the price of oil,” says Ben Judah, author of Fragile Empire, a study of Putin’s Russia. “Eventually, the money is going to run out, and then he will find himself in the same position Soviet leaders were in by the late 1980s, forced to confront political and economic crises while trying to hold the country together.”
Energy is a potent weapon for the West in the new Cold War against Vladimir Putin-just as it was the last time around. President Barack Obama has already made the first move, announcing last week that he would speed up plans to export liquefied natural gas, or LNG, to Asian and European markets.
He’s also removed 1970s restrictions on exporting U.S. crude oil, goaded by accusations by Republican Speaker of the House John Boehner that the White House’s prevarication on oil and gas export licenses was helping Putin “to finance his geopolitical goals.”
And he’s sold off 5 million barrels of the U.S.’s 727-million-barrel-strong strategic reserve, depressing prices, as a “test release.” (Putin too has played the energy card: On April 1, Russian state-controlled gas giant Gazprom announced a more than 40 percent price hike for natural gas to Ukraine.)
As in the Cold War, Russia Is Vulnerable on Energy - Newsweek