Armstrong Economics Blog/Energy Re-Posted Apr 28, 2022 by Martin Armstrong
Reports are circling that the Biden Administration has begged Germany to hold off on banning Russian oil until after the midterm elections. The Democrats are so desperate to win amid their record-low popularity that they are openly asking other nations to alter major policies at the expense of the people. Biden has banned Russian energy imports, but the EU, which is more reliant on Russian energy, must wait.
Banning Russian energy will backfire on Europe and send aftershocks throughout the market. German Foreign Minister Annalena Baerbock initially announced that Germany would cease purchases from Russia but quickly changed her stance. Finance Minister Christian Lindner said that Germany would support Ukraine but not at the expense of the German people. “It was a mistake that Germany became so heavily dependent on energy imports from Russia,” she admitted after avoiding warnings years ago.
Germany is the #1 importer of Russian energy, with 34% of its total petroleum coming from Russia. Nearly half of Germany’s coal is tied to Russia, and one-third of homes are heated with Russian imported oil. Germany purchased 27 billion tons of crude from Russia in 2021 alone.
Zelensky has cried that the EU is spending “blood money” on Russian energy without understanding there is no immediate alternative. Zelensky accused nations who purchase Russian oil of being guilty of genocide and war crimes. “If Russians are committing war crimes, even genocide, whoever is supplying Russia with this bloody money is guilty of the same war crime.” If he had his way, he would punish each nation accordingly.
Germany recently stated they will ban Russian oil by the end of the year, regardless of the repercussions, and will ban gas imports by next year. While it is unconfirmed whether Biden begged Scholz to hold off on additional sanctions, the prospect is highly likely. In the end, Biden, Scholz, and Zelensky are subservient to the Build Back Better agenda, and policies will be aimed at that socialistic goal rather than what is best for the people.