So let’s see.
Russia and Crimea are following the same roadmap that the United States and Texas followed when Texas officially left Mexico on March 2, 1836. TX became an independent republic. It subsequently joined the United States in 1845.
How do you say “Remember the Alamo” in Russian?
New Ukrainian political chief visits the White House. President O supports democracy. What else is new? Coincidentally, the US Strategic Petroleum Reserve (SPR) announces a “test” sale of 5 million barrels. No comment is made publicly about the linkage of these two items. Strange timing, if truly coincidental. Otherwise, it is a very weak signal to send.
Oil prices drop on SPR announcement, but international prices tied to Brent don’t change much. Libya, Nigeria, and geopolitics everywhere else in the oil patch are much more important to the Brent-based pricing mechanism than are US policy and the WTI-based mechanism. President O could really have made a big splash by announcing pipeline expansion, more and faster approvals of exploration, and an addition to US capacity in place. Five million barrels in a one-time sale is a smidge.
(One note on language. When the Putin uses the word Ukraine, he does not include Crimea in its definition. When Sec. Kerry or President O uses the same word, they do. So their statements have different meanings.)
[Hear More: Marc Chandler: Ukraine-Crimea Situation More Bluster and Hype Than Geopolitical Threat]
The European Union’s response has been no more effective than the US’s in countering Russia’s ambitions. And it is the EU that is critical here. They passed on an early opportunity in Ukraine but for good reason. They saw the corruption in place and the misallocation of resources and did not want to throw $15 billion down a bottomless pit. Now they face a dilemma. They are cornered by events and are committing the $15 bn after the fact. They will end up paying more and getting less now that the Russian takeover of Crimea is a foregone conclusion.
So, the EU gets less and pays more, and the US says more and does less. Putin already won this round. Crimea will become formally tied to Russian in some way. The US appears weak. The US Congress blusters and looks silly.
For EU and US leaders, the best lessons from history that apply here come from Metternich (the father) and Machiavelli and Teddy Roosevelt as in “speak softly and carry a big stick.”
It is a mistake to speak loudly and carry no stick.
Stay tuned for an interesting weekend.
