Publications: Notes at the Margin

Putin's Revenge on the US? (March 9, 2020)


In December 2019, the United States Congress passed and President Trump signed the National Defense Authorization Act (NDAA). Along with defense spending, the NDAA required the imposition of new sanctions on the companies involved with Russia's Nord Stream 2 natural gas pipeline project between Narva Bay, Russia, and Lubmin, Germany. The goal was to limit the amount of natural gas flowing between Russia and Western Europe, possibly enabling US firms to sell more gas to Europe.


As has been common since Donald Trump's inauguration in 2017, US senators and representatives and State Department officials likely thought Russia had no recourse to the NDAA sanctions. They may be wrong. Friday, Russia refused to cooperate with OPEC in efforts to stabilize crude prices by cutting production. The consequence may be a substantial decline in oil and gas prices, one that would threaten the economic viability of the US independent producers driving the increases in domestic oil and gas production. Their collapse could be quick. It could also be Putin's goal and his revenge for the United States' actions against Nord Stream 2.


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