Copyright kyivpost
Few thought it would be so quick: Oil giant Lukoil became the first casualty of the newly minted US sanctions against Russia’s all-important hydrocarbons sector. The company is urgently looking for buyers for its foreign assets and whilst estimates vary, it could cost one of the oldest and biggest Russian oil companies up to 30% of its business. Lukoil is nominally a private company. It belongs to one of the country’s veteran oligarchs – Vagit Alekperov. But in Russia all major energy companies are de facto state-controlled. Lukoil’s decision to leave the global market is a blow to the Kremlin’s strategy of financing the aggression against Ukraine with oil exports. No doubt Putin’s administration instructed Alekperov to look for a friendly buyer that will serve as a front – but this is not an easy task. Putin has no one to blame for this situation but himself. It was he who refused Donald Trump’s request for a ceasefire as a prerequisite for a – now cancelled – US-Russia summit in Budapest. And it was he who instructed foreign minister Sergei Lavrov to tell Secretary of State Marco Rubio that Moscow wants any peace talks to “address the root causes of the conflict” – a Kremlin euphemism that means replacing the Ukrainian government with a Russia-friendly one. This intransigence rattled the US president and led him to sanction Lukoil and Rosneft, the latter a wasteful oil behemoth headed by one of Putin’s closest friends (former KGB officer Igor Sechin). Putin likes to present himself as a cool and calculating master strategist, a peerless leader with 25 years of global political experience under his black karate belt. So why did he commit such an evident blunder in dealing with the US? After a quarter century in power a kind of royal court has formed around Putin, almost like in the waning days of the Bourbons in France. For many years it has been ‘staffed’ by more or less the same people, most of them Putin’s peers. Its task is simple and self-serving, as tends to be the case with courts: to prolong its own existence and access to the state budget and the country’s resources, off which they feed via corrupt schemes. To this end, the leader must be kept satisfied, convinced that everything is being done well and going smoothly under his wise leadership. In addition Putin clearly sees himself as a tool of Providence, charged with an exceptional historical mission – the revival of Russia’s greatness. For members of the court, arguing with this is dangerous and pointless. One can only loudly and emotionally agree. Therefore, the courtiers do what their predecessors around Louis XV or his hapless successor did: They present Putin with what appears to be the truth – but not the whole truth, political and economic analysis – rather a smoothed-over version, and recommendations which in reality are a poorly disguised flattery. The aggression against Ukraine has made this trend irreversible. In such an environment, any idea of a compromise with real or perceived enemies is immediately branded as treachery – unless put forward by Putin himself. But he doesn’t seem to entertain any such thoughts, precisely because his entourage has been feeding him half-truths for years. Now Lukoil and Rosneft must face the consequences of Putin’s bizarre decision-making. Trump cannot lift or freeze the sanctions without a massive blow to his credibility – unless Putin grants him some kind of concession for the potential future peace talks on Ukraine. I am certain that this will not happen any time soon. Konstantin Eggert is a Russian-born journalist with DW, Germany’s international broadcaster. He is based in Vilnius and was previously editor-in-chief of the BBC Russian Service Moscow bureau. Reprinted from euractiv.com. See the original here.
