Larry Kudlow: Putin only invades a country when fossil fuel prices soar

Permit me to expand on an energy story that we talked about last night. Tonight, we have the great Rick Perry to also comment on it. Namely, how in round numbers, Europe is sending about as much financial assistance to Russia via its LNG imports as it is to Ukraine to defend its freedom. Makes no sense at all — unbelievable hypocrisy.  

Believe it or not, Europe’s paying Russia just short of 30 billion euros, and the EU collectively is sending about 29 billion euros in military and financial assistance to Ukraine. Go figure! Why? Because radical green decisions, especially by Germany not to build out their own liquid natural gas terminals and to blindly rely on Russian energy.  

What’s more? The Biden administration’s own radical climate change policies have, of course, compounded this tragic mistake. Because Biden put the clamps on new permits and pipelines and refineries and LNG terminals, along with Germany’s short-sightedness — everyone played into Vladimir Putin’s hands. Whether it’s a shortage of LNG production here at home, or short-sightedness in Europe, stupid policies are financing Putin’s war effort — which continues.  


Now let me expand on this thought. Putin does not invade any place when his principal cash crop — that is, fossil fuels — is cheap. But he does get on his high horse and resumes his megalomania when fossil prices soar. Now please think about this.  

Putin invaded Georgia back in August of 2008 when the price of oil was about $125 a barrel. Now, hang on a minute. Putin invaded Crimea in February 2014 when oil was $103 a barrel. Coincidence? I don’t think so. Then, go back to last February 2022 when oil was $92 a barrel, just short of the century mark and guess what? The Russian dictator invaded Ukraine. Coincidence? I don’t think so.  

Now, remember the late John McCain’s great economic analysis that Russia is a “gas station masquerading as a country”? It was Sen. McCain’s finest moment… but it was not ours. But Putin grasped the McCain analysis with great clarity.  

Now, let’s switch gears. Between January 2017 and January 2021, during the Trump administration, the average price range pre-COVID was $40 to $60 a barrel. In other words: cheap oil. In other words: Putin’s gas station wasn’t turning a big enough financing profit to launch any new invasions. 


Russian President Vladimir Putin speaks after Ukraine annexation

Russian President Vladimir Putin joins hands with Moscow-appointed head of Kherson Region Vladimir Saldo, Moscow-appointed head of Zaporizhzhia region Yevgeny Balitsky, Denis Pushilin, leader of self-proclaimed Donetsk People’s Republic and Leonid Pa (Grigory Sysoyev, Sputnik, Government Pool Photo via AP / AP Newsroom)

Now did Trump have to go to war with Putin to stop the Russians? No. Did he have to threaten Putin? No. All he did was totally open the spigots for U.S. oil and gas production. All Trump did was grant permits for fracking, pipelining, refining and all the rest of it. All Trump did was make efficient use of America’s greatest natural resource, perhaps its absolute America’s greatest natural resource, which powers about 80% of the best economy in history, with the largest decline of carbon emissions in the world, and all that kept Vladimir Putin at home, riding his old brown horse without even a shirt on his back. Now, is that a coincidenceI don’t think so.  

You know what? This whole mess — the Ukraine war, American inflation, the recession, the hardships, everything. This whole mess need not have happened — and that is my riff tonight. 

This article is adapted from Larry Kudlow’s opening commentary on the December 8, 2022, edition of “Kudlow.” 

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