How Washington transforms red lines for Ukraine into green light for the Kremlin.
So, US Secretary of Defense Lloyd Austin, following the White House (Admiral Kirby) and State Department (Mueller) spokespersons some time ago, spoke out against Ukrainian attacks on Russian oil refineries. He said that "these attacks could have a domino effect on the global energy situation." He said that "it is more useful for Ukraine to pursue tactical and operational goals that can simultaneously affect the current struggle." Much has already been said about the absurdity of such statements, as well as about the worthlessness of this American approach in general. But do not rush to throw stones at Austin...
The share of Russia's gasoline exports in world consumption is just over 1%, and diesel - 3%. If all Russian gasoline and diesel exports disappeared at the same time, other suppliers would quickly fill this niche - the same Indians, Turks and Chinese who produce it from Russian oil.
I have written before that the problem of rising prices in the American fuel market lies in the inept Middle East policy of the Biden-Burns-Sullivan trio. In fact, this trio pushed the Saudis into the arms of Russia and China. The OPEC+ format is ruled by Russia, Saudi Arabia, and Iran, which need high oil prices. They agree to reduce export quotas, and the global market is slightly short of barrels, and then there are the Houthis, who act in line with the interests of Tehran and Russia and drive tankers along a long route, as well as the ineptitude of the Western coalition (read: the United States), which has not been able to curb the Houthis for several months. As a result, prices for raw materials are rising, and the cost of refined oil products is rising accordingly, including in the US domestic market.
But this is not all and far from the main thing that shapes the US position. In fact, there was no unity in the attitude of various agencies to our strikes on Russian refineries. It was Austin's department, unlike the CIA's Burns and the National Security Council's Zheka Selivanov (aka Jake Sullivan:), that was quite sympathetic to the Ukrainian strikes, since refineries are legitimate targets, especially since Russia has been destroying Ukrainian oil depots and refineries since 2022. Blinkin's office was in a characteristic diplomatic "on the ropes" position. Prominent American generals such as Hodges, Clark, and Petraeus were quite clear in their comments about the validity of Ukraine's strategy to destroy the aggressor's critical energy infrastructure, thus supporting Austin's unarticulated position.
It is obvious that Austin was pressured, especially since he has Celeste Wallander in charge of international security issues. It is noteworthy that this lady, who has been well-known in certain academic circles since the early 2000s, was appointed to the position of Assistant Secretary of Defense a week after the famous meeting between Biden and Putin in Geneva on June 16, 2021. And she was appointed from her position as President and CEO of the US-Russia Foundation, which she has led since 2017. Although she has not been known for her pro-Russian sympathies in the past, she has not been noticed in actively opposing Russia in responsible positions. On April 10, this particular lady made headlines for her wild remarks at a hearing of the US House Armed Services Committee on the civilian nature of Russia's oil and gas infrastructure. She came to the aid of her boss, so to speak. She was probably applauded in the Kremlin.
So, after these statements by Austin-Wallander, we now have a consolidated position of key American agencies, from the State Department and the Pentagon to the White House. The CIA did not officially express its position, but it is unofficially known that they were the first to "make waves" on the banks of the Potomac.
Why? Officially, it sounds like the Biden-Sullivan-Burns group needs low prices at gas stations before the election. Of course, this is true. But not the whole truth.
It is worth remembering that high oil prices are of interest not only to the aggressive regimes of Moscow and Tehran, but also to the leading US oil companies. Especially those that made good money in 2022 at the peak of oil prices. Two of them are particularly noteworthy because they traditionally have an influential lobby in American administrations, regardless of who sits in the White House. We are talking about the top companies ExxonMobil and Chevron, whose interests have traditionally meant a lot to American politics since the 20s of the last century. They are also known for their involvement in large-scale oil production projects in Kazakhstan since the 90s. Especially Chevron.
Oil is produced in Kazakhstan and transported to the world market through Russia via the Tengiz-Novorossiysk oil pipeline of the Caspian Pipeline Consortium. The 1,511 km of the pipeline runs mainly through Russia, with oil being shipped at the Yuzhnaya Ozereyevka terminal near Novorossiysk. The CPC is operated by the Russian oil transportation monopoly Transneft.
In other words, Russia is tightly controlling the oil flow of American companies from Kazakhstan. If you want to keep your profits, American oil guys, then act in a way that makes you and us feel good, because otherwise we will turn off the oil tap.
Exxon's corporate report clearly states: "...if Russia takes countermeasures in response to existing sanctions prior to its military actions in Ukraine, it is possible that the transportation of Kazakh oil through the CPC pipeline could be interrupted, curtailed, temporarily suspended or otherwise restricted. In such event, the Corporation could experience a loss of cash flows of indefinite duration."
For Chevron, which has pioneered the development of Kazakhstan's fields since the late Soviet era, the Tengiz field is a global gold mine. The TengizShevrOil joint venture (Chevron (50%), Exxon Mobil (25%), KazMunayGas (20%) and Lukoil (5%)) celebrated its 30th anniversary on April 6 last year. The company continues to develop production at the field and has invested over USD 40 billion in a new phase of its expansion. The company has invested over USD 40 billion in a new phase of its expansion.
To understand the scale of these companies and the extent of their influence on the White House, a few numbers. In 2022, Chevron's revenue amounted to $235.71 billion. This is an increase from the 2021 revenue of $155.60 billion. ExxonMobil's figures are even more impressive - $413.68 billion. USD for 2022 and 285.64 billion a year earlier. For comparison: Ukraine's GDP in 2022 amounted to USD 160.5 billion.
Western industry analysts noted that Chevron expects the Tengiz field to remain highly profitable and that dividends to shareholders in 2023 will be higher than in 2022. At the same time, industry analysts have warned that the CPC pipeline route and the Tengizchevroil JV remain vulnerable to potential Russian retaliation against international sanctions imposed by the United States and European countries last year in response to Russia's invasion of Ukraine in February 2022.
However, in reality, Chevron is not too concerned about possible "Russian retaliation." It is much easier for it to resolve the issue through a chain of its people and lobbyists in Washington than to diversify the routes for exporting 30 million tons of oil from Kazakhstan bypassing Russia.
By the way, this company is one of the leading participants in the interesting configuration of the Fort Ross Dialogue, initiated and sponsored by Russia's Transneft and Sovcomflot and the US Chevron. Russian Ambassador Antonov, in his speech at the 10th anniversary forum of the Dialogue in 2021, noted: "...Despite all the difficulties, Moscow and Washington, after the June summit of the leaders of the two countries in Geneva, were able to establish a sustainable dialogue through the Security Councils and foreign ministries." And here's some more pathos: "Sovcomflot, Transneft and Chevron are long-term sponsors of the Fort Ross Dialogue project. Since 2012, the three companies have been supporting initiatives to preserve and popularize the Russian cultural and historical monument in California, as well as to promote dialogue between Russia and the United States."
And Russia is taking full advantage of various configurations, including to resolve the issue of ending Ukrainian attacks on Russian refineries. Of course, no one is going to convene another Fort Ross Dialogue forum, but it is possible to use backstage levers without too much pathos and noise. This is nothing more than a dialogue between Russia and the United States in a difficult time of geopolitical tension, where the preservation of American companies' profits and the payment of dividends to shareholders is a matter of concern for the US administration, especially before the elections.
The 4-step algorithm of Moscow's influence on the White House using the CPC mechanism is simplified as follows:
- The Kremlin, through Transneft (its current head, N. Tokarev, was Putin's former boss at the Dresden residence of the USSR KGB), "friendly" asks Chevron to "work in Washington";
- Chevron activates its people and lobbyists, formulates and distributes tasks together with a cover operation to stay behind the scenes;
- Lobbyists run to government agencies with relevant instructions and a draft of the "right messages" to be delivered to Ukraine;
- Spokespersons for government agencies deliver the "right messages".
And to remove the unpleasant taste of being humiliated by Washington's shenanigans, Transneft pays dividends to the CPC shareholders, including subsidiaries of Chevron and ExxonMobil: Chevron Caspian Pipeline Consortium Company - 15%, Mobil Caspian Pipeline Company - 7.5%. In 2023, CPC shareholders were paid $1.34 billion in dividends. Of course, this is not a multi-billion dollar amount of dividends from the main activity of exporting extracted oil, but it is also a lot of money.
Given the need to build and maintain an election fund, Biden's team is keen to get additional donations. And here is such an opportunity! Especially since the money doesn't smell. And for the Kremlin, this is an effective mechanism for elegantly corrupting a geopolitical enemy (I wonder if there will ever be an anti-corruption investigation into this?) and turning it into a passive accomplice through the red lines it draws for Ukraine.
This is how Washington's red lines for Kyiv turn into a green light for the Kremlin. Today's attack on Ukraine's critical energy infrastructure is proof of this. It is significant that the attacks are not only on electricity facilities, but also on the underground gas storage system. After all, the Biden-Sullivan-Burns trio has not drawn any red lines for Moscow. It's much easier for them to bend Austin and let Wallander make idiotic statements.
