How Washington transforms red lines for Ukraine into green light for kremlin – Michael Gonchar

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green light yes to all

So, US Defense Secretary Lloyd Austin, following Biden’s national security spokesman John Kirby, and State Department spokesperson Matthew Miller some time ago, spoke out against Ukrainian attacks on russian oil refining. According to them, “these attacks could have a domino effect on the global energy situation.” They say, “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 the worthlessness of such an American approach in general. But don’t rush to throw stones at Austin, writes President of Centre for Global Studies “Strategy XXI” Michael Gonchar.

The share of russia’s gasoline exports in global consumption is slightly more than 1%, and diesel – 3%. If all russian exports of gasoline and diesel disappeared simultaneously, then other suppliers would quickly fill this niche – like Indians, Turks, and Chinese who produce it from russian oil.

I have already 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. It was this trio that pushed the Saudis into the arms of russia and China. In the OPEC+ format, russia rules with Saudi Arabia and Iran, which need high oil prices. They are agreeing to reduce export quotas and the global market comes short of barrels, and there are also the Houthis, who act in concert with the interests of Tehran and russia, and force tankers along a longer route, and also the incompetence of the actions of the Western coalition [read – the US], which for several months now wasn’t able to tame the Houthis. As a result, prices for raw materials are rising, and accordingly, the cost of refined oil products is rising, including in the US domestic market.

But this is not all, and far from the main thing that forms the position of the US. There was no unity of various departments toward our strikes on russian refineries. In fact, in Austin’s department, in contrast to Burns’ CIA and Jake Sullivan’s NSA were completely sympathetic to the Ukrainian strikes, since refineries are legitimate targets, especially since russia began to destroy Ukrainian oil depots and oil refineries in 2022. Blinken’s office was in a very particular diplomatic position “side split.” Formidable American generals – Hodges, Clark, Petraeus – in their comments spoke quite clearly about the validity of Ukraine’s strategy to destroy the aggressor’s critical energy infrastructure, thereby supporting Austin’s unarticulated official position.

It is obvious that Austin was pressured, especially since Celeste Wallander is in charge of international security. It is noteworthy that this lady, who has been quite well-known in certain academic circles since the early 2000s, was appointed to the position of assistant minister of defense already a week after the famous meeting between Biden and putin in Geneva on June 16, 2021. And she was appointed from the position of president and general director of the USA-russia Foundation, which she managed since 2017. Although she was not noted for her pro-russian sympathies in the past, she was also not noticed in active opposition to russia in her various responsible positions. This very person on April 10 got into the headlines of mass media because of her wild statement at the hearing in the Armed Forces Committee regarding the civilian nature of russia’s oil and gas infrastructure. She came to help the boss, so to speak. She was probably applauded in the kremlin, too.

So, after these statements by Austin-Wallander, we now have a consolidated position of key American agencies – from the State Department, the Pentagon, and the White House. The CIA did not officially express its position, but unofficially it is 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 on gas before the election. Of course, it is true. But it is not the whole truth.

It is worth mentioning that high oil prices are of interest not only to the aggressive regimes of moscow and Tehran, but also to leading US oil companies. Especially those that made good money in 2022 at the peak of oil prices. Two of them are particularly notable 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 weighed heavily on American politics since the 20s of the last century. They are also known for participating in large-scale oil production projects in Kazakhstan since the 90s. Especially Chevron.

Oil is extracted in Kazakhstan and transported to the world market through russia via the Tengiz-Novorossiysk oil pipeline of the Caspian Pipeline Consortium [CPC]. The 1,511 km pipeline runs mainly through russia, with oil being shipped from the Yuzhnaya Ozereyevka terminal near Novorossiysk. The operator is the russian oil transport company Transneft.

So russia imposes strict control on the oil flow of American companies from Kazakhstan. Want to keep your profits, American oil guys? Then act in such a way that it will be good for you and us, because otherwise, we will close the oil tap.

Exxon’s corporate report clearly states: “…if russia takes countermeasures in response to existing sanctions for 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 a case, the Corporation may suffer a loss of cash flows of indefinite duration.”

For Chevron, which has been a pioneer in the development of Kazakhstan deposits since the late Soviet times, the Tengiz deposit is a golden vein on a global scale. The TengizChevrOil 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 and has invested more than USD 40 billion in a new phase of its expansion.

In order to understand the scale of these companies and the extent of their influence on the White House, we need to look at a few numbers. In 2022, Chevron’s revenue was USD 235.71bn, having increased in comparison with the income of 2021, which amounted to USD 155.6bn. ExxonMobil has even more impressive indicators – USD 413.68bn for 2022 and USD 285.64bn a year earlier. For comparison: the GDP of Ukraine in 2022 was USD 160.5bn.

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. Meanwhile, industry analysts also warned that the CPC pipeline route and Tengizchevroil JV remain vulnerable to potential russian retaliation against international sanctions imposed by the US 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 revenge”. It is much easier for them to solve the issue through a chain of his people and lobbyists in Washington than to diversify the export routes of 30 million tons of extracted oil from Kazakhstan to bypass 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 the russian Transneft and Sovcomflot and the American Chevron. In his speech at the 10th Anniversary Dialogue Forum in 2021, russian ambassador Antonov 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 stable dialogue along the lines of the Security Councils and Foreign Policy Departments.”

And here’s a little more pathos: Sovcomflot, Transneft and Chevron are long-term sponsors of the “Fort Ross Dialogue.” Since 2012, the three companies have supported initiatives to preserve and popularize the russian cultural and historical monument in California, as well as contribute to the expansion of the dialogue between russia and the United States.

And russia makes full use of various configurations, including the possibility of stopping Ukrainian attacks on russian refineries. Of course, no one will convene the next forum of the Fort Ross Dialogue, but you can use the behind-the-scenes levers without too much pathos and noise. Nothing like that – this is just a dialogue between russia and the US at a difficult time of geopolitical tension, where the preservation of the income of American companies and the payment of dividends to shareholders is a matter of concern for the American administration, especially before the elections.

The 4-stroke algorithm of moscow’s influence on the White House using the CPC mechanism looks as follows:

  • The kremlin through Transneft [its current head, N. Tokarev, in the past putin’s boss in the Dresden residency of the KGB] “friendly” appeals to Chevron “to work in Washington”;
  • Chevron activates its people and lobbyists, formulates and distributes tasks along with the cover operation to stay behind the scenes;
  • Lobbyists run to government institutions with relevant instructions and a draft of the “correct messages” to be delivered to Ukraine;
  • Spokespersons of government agencies voice the “correct messages”.

And in order to remove the unpleasant aftertaste of the humiliation of the world oil giant’s leadership in Washington, Transneft pays dividends to the shareholders of the CPC, among which are subsidiaries of Chevron and ExxonMobil: Chevron Caspian Pipeline Consortium Company – 15%, Mobil Caspian Pipeline Company – 7.5%. For 2023, the CPC shareholders were paid USD 1.34bn in dividends. Of course, these are not multi-billion sums of dividends from the main activity of exporting extracted oil, but it is also a lot of money.

Given the need to form and maintain an election fund, Biden’s team has an increased interest in receiving additional donations. And this is exactly such an opportunity! Especially since money doesn’t smell. And for the kremlin, this is an effective mechanism for elegantly corrupting a geopolitical opponent [I wonder if there will ever be an anti-corruption investigation on this matter?] and also turning him into a passive accomplice through the red lines he draws for Ukraine.

This is how Washington’s red lines for Kyiv turn into a green light for the kremlin. Today’s attack on critical energy infrastructure facilities in Ukraine is a confirmation of that. It is significant that the blows come not only to the electric power facilities but also to the system of underground gas storage facilities. After all, the Biden-Sullivan-Burns trio did not draw any red lines for moscow. It is much easier for them to bend Austin and release Wallander with idiotic statements.

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