The Russian oil debacle | The Hill

The problem is money. Despite Russian President Vladimir Putin’s brutal war against Ukraine and subsequent Western sanctions on his regime, Russia is swimming in petrol dollars. By the end of the year, the Russian Economy Ministry estimates that the country will have made a record $338 billion from its energy exports. This money supports the Russian economy, buoys its current account, and – less directly – helps to finance Putin’s war against Ukraine.

Finally, there is a historic precedent. A previous international price-fixing scheme failed — spectacularly. In the 1990s, the UN’s disastrous Oil for Food Program inadvertently created a corrupt patronage system for artificially cheap barrels of Iraqi crude.

Assuming that EU and G-7 leaders can sort out their current price puzzle and fix Russian crude below what the international market would prefer to pay, who will pick winners and losers in the subsequent scramble for cheap Kremlin oil: Putin and his energy cronies? Will corrupt kickback “fees” be required to purchase these newly discounted barrels of crude — as was the case in the UN’s Oil for Food Program? And if Moscow goes along with this scheme, the gold rush for potentially low-cost Russian barrels may inadvertently increase the Kremlin’s power as a kingmaker and rainmaker of petroleum fortunes.

The Russian oil debacle | The Hill