Tropic Cat, Putin isn't holding all
the cards. He has been a terrible economic manager, running up a huge deficit with various projects including the winter olympics
. The simple fact is that he needs to sell oil
in order to keep the ship afloat - a reduction in production (or in his market) would put the country in a downward spiral similar, if not as serious as the sitation that now exists in Venezuela
. So yes, he can threaten stopping sales to Europe
if they impose sanctions, but he cannot afford to carry that threat out.
Indeed, if the United States and Saudi Arablia would loosen up reserves for a year or two (and it is generally acknowledged that with the increase in US production now and in the forseeable future, their reserves are too high), they could sell to other countries that are currently buying
from Russia. The result would be a loss of markets for Russia in oil and a real impact on their economy. If this were to occur, the European nations need not impose any actual sanctions - they need only increase their purchases from sources other than Russia.
Although these countries would continue to buy some oil from Russia, the increased supply would drive down the price
of oil - and since the world value of natural gas tends to rise and fall with oil, drive it down as well. In that way, Russia's sales would decrease as would the amount they were receiving per barrell. One article I read suggested that even if Russia continued its current
market share, if oil dropped by $10.00 a barrel Russia would rapidly find itself in some serious difficulty.
If so, where would they turn? Could they then rely upon the World Bank for a short-term bail out? I suspect not, for that is another area where United States, England
and other nations offended by this could refuse loans pending Russia's withdrawl from the Ukraine
Why would Saudi Arabia join in on this? Simple. They are on the opposite side of Russia on the issue of Syria and no doubt see this development as particularly troublesome - especially if it signals a trend that could continue into Syria. What is more, various members of OPEC have broken ranks in the past to sell more oil than currently recommended by the cartel.
All of this is wildy speculative, of course. However, it would not surprise me if the US and the Saudis (and the Canadians, who are large exporters and whose Prime Minster has been particularly bellicose about the Russians) are already putting plans in place to open up the reserves and arrange shipping
to Europe and other places that Putin believes are dependant upon him. It will take time to play out, of course. In the interim, we can only hope that diplomacy works and gives Putin a way to get out without losing face.
P.S. Keep in mind that what I am proposing are not actually sanctions at all. The US, Canada
and Saudi Arabia are entitled to open up their reserves and sell oil to whoever they want. Its the free market system by which Russia has benefitted in the recent past. I think it would be nice to see them suddenly find out that they still don't fully understand the free market system - that it can be an old-boys club that is a little less than free! As to the World Bank - again, not a sanction at all. They are entitled to put conditions on loans and they typically do.