If anyone is wondering what is the one, sole driving force behind Joe Biden's foreign policy, here is the answer: It's always been about the oil, stupid. Whether it was becoming best friends with the "evil dictators" in Iran and Venezuela in hopes of keeping their oil output in the market and depressing the price of the commodity, or enacting purely optical sanctions on Russian oil exports which have led to record oil exports - and export revenues - by the Putin regime, the handlers of the senile president have been terrified of any false move that sharply reduces the supply of oil or its byproducts in the global market, sending commodity prices - and inflation - surging, and crushing Biden's re-election chances.
Which brings us to the latest surreal news.
Recall that in recent days, Ukraine has taken its drone attack raids deep inside Russian territory, hitting Putin where it hurts, namely bombing one Russian oil refinery after another. Now granted, Ukraine can do far worse and sink Russian oil tankers, but Kiev understands that this would spark outrage at the White House as it would instantly send oil prices surging, although once Trump is in the White House, Ukraine will have no such concerns as we pointed out earlier this week.
Ukraine only attacking Russian refineries with drones instead of sinking Russian tankers as that would send oil soaring and would cripple Biden re-election odds.
— zerohedge (@zerohedge) March 17, 2024
Once Trump wins, Ukraine will go scorched earth on Russian oil infra/tankers.
However, after the onslaught of Ukraine attacks on Russian refineries shut down over 600,000 barrels of Russian daily refining...
... this morning the FT reported what our readers already knew, namely that the Biden admin is freaking out that Ukraine's drone strikes "risk driving up global oil prices" which is why Biden has "urged Ukraine to halt attacks on Russia’s energy infrastructure."
And it wasn't just once, or twice: the "repeated warnings" from Washington were delivered to senior officials at Ukraine’s state security service, the SBU, and its military intelligence directorate, known as the GUR, sources told the Financial Times, as both intelligence units had steadily expanded their own drone programs to strike Russian targets on land, sea and in the air since the start of the Kremlin’s full-scale invasion in February 2022.
One person said that the White House had grown increasingly frustrated by brazen Ukrainian drone attacks that have struck oil refineries, terminals, depots and storage facilities across western Russia, hurting its oil production capacity as we discussed previously. But what is really being hurt is America's enthusiasm to refill their car after the average gasoline price in the US soared above $3.50, the highest since October and above year-ago levels.
And about to go higher...
As the FT redundantly notes, "Russia remains one of the world’s most important energy exporters despite western sanctions on its oil and gas sector." Of course, the "despite" here is a joke: if western sanctions really wanted to halt Russian oil exports they would; instead just like in the case of Ukraine targeting Russian oil infrastructure, "virtuous" western leaders are all about "helping" Ukraine (of course with your money, dear taxpayers) as long as it does not interfere with their re-election chances. Which means keep any sanctions purely in the optical arena as the alternative is a sharp spike in oil prices. Indeed, oil prices have risen about 15 per cent this year, to $85 a barrel, pushing up fuel costs just as the figurehead in the White House begins his campaign for re-election.
The White House is also concerned that if Ukraine keeps hitting Russian facilities, including many that are hundreds of miles from the border, Russia could retaliate by lashing out at energy infrastructure relied on by the west. This includes the CPC pipeline carrying oil from Kazakhstan through Russia to the global market. Western companies including ExxonMobil and Chevron use the pipeline, which Moscow briefly shut in 2022.
“We do not encourage or enable attacks inside of Russia,” an NSC spokesperson said. The CIA declined to comment. In Kyiv, a spokesperson for the SBU declined to comment. Officials at GUR and Zelenskyy’s office did not respond to requests for comment.
As reported previously, Ukraine had stepped up its air attacks in recent weeks, as its drone programs expand and the ground war shifts in Moscow’s favor. It also follows growing discontent in Kyiv over what is seen as the west’s ambivalent approach to curbing Moscow’s energy revenues. Since 2022, there have been at least 12 attacks on major Russian refineries, and at least nine this year, along with several terminals, depots and storage facilities, according to a military intelligence official in Kyiv.
Ukraine has steadily increased drone strikes as its technologies have advanced. Ukrainian officials claim to have developed drones with a range in excess of 1,000km and payloads capable of inflicting severe damage. Kyiv launched two of its largest and most widespread drone attacks last week, with operations by both the GUR and SBU successfully targeting seven Russian energy facilities in consecutive days.
Over the past year, GRU and SBU sea drones have also struck Russian ports, destroyed several Russian warships in the Black Sea and hit Moscow’s prized Crimea bridge connecting Russia to the occupied Ukrainian peninsula. The aim of the “special operations” is to hamper the supply of fuel to Russia’s troops and cut funding for the Kremlin’s war effort, according to one Ukrainian official involved in planning and conducting the attacks. This is something the West pretended it was doing with "sanctions" which turned out to be anything but.
Helima Croft, a former CIA analyst now at RBC Capital Markets, recently noted that Ukraine had shown it could strike most of the oil export infrastructure in western Russia, putting about 60 per cent of the country’s exports at risk.
After the Financial Times published news of the US warnings on Friday Olha Stefanishyna, Ukraine’s deputy prime minister for European and Euro-Atlantic integration, was asked how Kyiv had responded to the Biden administration’s appeals to stop attacks on Russian refineries.
She said: “The Ukrainian side responded, I think, precisely by achieving its goals and by very successful operations conducted on the territory of the Russian Federation.”
“We understand the appeals of our American partners,” Stefanishyna told an audience at the Kyiv Security Forum. “At the same time, we are fighting with the capabilities, resources and practices that we have today.” She said energy facilities were legitimate targets from a military point of view, even as the Biden admin clearly disagreed.
In other words, a defiant Ukraine is now openly biting the hand that feeds it. Which means that Ukraine's attacks on Russian refiners is rapidly emerging as a problem that only such a legendary energy expert as Hunter Biden can solve.
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“Nothing terrifies a sitting American president more than a surge in pump prices during an election year,” said Bob McNally, president of consultancy Rapidan Energy and a former White House energy adviser.
Hilariously, while the air campaign is also seen by some officials as a means to spur Washington into approving the $60bn military assistance package held up in Congress that is critical for Ukraine’s defence, what is more likely to happen is that even Biden decides to give more funding to Ukraine which is now using US made weapons to directly reduce his re-election chances.
