Pirani says,
“In the seven months between then (February 2022) and the explosions, the western powers piled sanctions on Russia in response to the invasion. The Kremlin retaliated by ordering Gazprom, the state-controlled gas holding company, to reduce gas exports to Europe, and effectively wreck a business it had spent more than thirty years building up.”
Actually, sanctions on Russia began in 2014, and continued to be increased in the 8 years between then and the invasion in 2022. As even Blairite, former NATO Secretary-General, George Robertson has said, NATO, basically goaded Russia into an invasion it had been claiming was imminent for months. Its following a similar course with China. The US began imposing trade sanctions on China under Trump, and like many other policies, Biden has simply continued what Trump started. It has been steadily blocking Chinese companies, and also using its muscle to prevent companies in other countries selling technology to China, or to align themselves with Chinese technology standards. It has shifted its military emphasis to the Pacific, much as it did in the 1930's against Japan, has been using Taiwan as a goad against China and so on. Now, as China says it might provide weapons to Russia, in the same way that NATO has poured weapons into Ukraine, the US says that, if it did, it would provoke sanctions, as though the sanctions have not preceded any such action already. In essence, imposing sanctions first, is just a further goad and incentive for those on which they are imposed to act in the way the sanctions are supposed to be a deterrent!
Day after day, NATO increased the sanctions on Russia, as though the promised invasion had actually happened, with no action against Ukraine for failing to meet its obligations under the Minsk Agreements, or its continued bombardment of the people of the Eastern Ukraine. That is a bit like Boris Johnson reneging on the Northern Ireland Protocol, and then complaining when the EU takes action for the breach. Day after day, NATO's propaganda machine, in claiming that a full-scale invasion was only hours away – reminiscent of the 45 minute claims ahead of the Iraq War – was basically goading Russia into invading, by saying, “go on, then, if you think you're hard enough!”
Once again, this illustrates the fact that, for the imperialists and their apologists, history only begins at the point of the Russian invasion. The decision not to go ahead with Nordstream 2, was clearly the decision of Germany, under pressure from the US, and its poodle Britain, and not the decision of Russia, which wanted to press ahead with it. But, the sanctions were also well documented to have affected the supply of gas via Nordstream 1 too. When the pipeline was taken down for maintenance, with turbines being sent to Canada, the sanctions prevented them being returned and put back to use, for example. Yet, Pirani does not mention these causes of Gazprom being unable to deliver gas arising from the sanctions themselves. Its true that Russia could have sent gas via Ukraine, but that ignores both the fact that its at war with Ukraine, and that Ukraine in the past is accused of stealing gas from pipelines across its territory.
In addition, The Financial Times warned in February 2022 that proposals to exclude Russia from the SWIFT payments system would threaten the EU's ability to pay for Russian oil and gas. Russia was banned from SWIFT, anyway, showing that US imperialism, with the EU subordinated to it, was prepared to damage the EU economy, simply to advance its own, short-term, military strategic objectives against Russia. It was the difficulties created by that for payments to be collected by Russian exporters, not just for oil and gas, but for other globally traded commodities that resulted in Russia demanding payment in Roubles, for all new contracts. But, even before that, the EU had voluntarily decided to boycott Russian oil, as Ed Morse described in his interview with Bloomberg.
Russia could have continued to supply gas without payment in Roubles, but would then have faced problem in obtaining payment for what it had supplied. What Pirani is suggesting is that, in a war, NATO and its supporters can be free to impose sanctions on Russia, but Russia cannot then be expected to respond to those sanctions, by imposing conditions of its own! You have to have a peculiarly blinkered and one-sided approach to reality to arrive at that kind of world view. That's not to side with or support Russia's actions, but merely to point out what is likely to happen in the real world!
Pirani basically parrots the US imperialist line, and claims about the effects of Putin's actions on Gazprom. But, the fact is that, in terms of oil, the loser was the EU, which saw its prices rise, as it bought the much more expensive US oil, whilst both the US and Russia gained. The US, or more correctly US oil companies and speculators, gained, because, as Morse points out, it sold lots more expensive oil to the EU, whilst Russia gained, because the price of oil, one of its main exports also rose, sharply, and it was able to replace its EU sales, easily, by selling the oil instead to China, India, and other Asian countries. China, whose economy was in the doldrums due to the idiotic lockdowns, had seen its demand for oil drop, but it bought up Russian oil, refined it, and then sold it back into Europe, at these much higher prices! Its been doing a similar thing with LNG.
The result was a bonanza for Russian oil and gas companies, and not the catastrophe that Pirani suggests, or that NATO imperialism had sought. The Russian economy, which had been predicted to tank, actually saw its GDP fall by less than many European countries, and the Rouble, which had been the target of sanctions, soared. Indeed, during 2022, when the Dollar rose by around 20% against most other currencies, and, in particular those of Britain and the EU, hammered by the high energy prices, the Rouble was one of the only currencies that rose against the Dollar. At the start of February 2022, the Dollar stood at 140 Roubles, and today stands at just over 70 Roubles, a rise in the Rouble of 100% against the Dollar, or a fall of 50% in the Dollar against the Rouble. That was another reason that Russia wanted payment in Roubles rather than in rapidly declining Dollars, and even more rapidly declining Euros!
The EU could have continued to get cheap Russian gas, if they had either kept Russia within the SWIFT system, or else had paid for the gas in Roubles. They chose not to do so, and the price of gas, in the EU rose by more than 1,000%, so whatever Pirani might claim about Russian gas not being particularly cheap, it was certainly much cheaper prior to those sanctions than it was as a result of them. That was a massive self-imposed injury on the EU economy, and one that it, not the US that pressed for it, endured. Pirani says that the price of gas was linked to the price of oil, but, as described, and as Ed Morse showed, the surge in the price of oil itself was a consequence of the self imposed injury the EU inflicted on itself by boycotting Russian oil!
Pirani also engages in what is effectively a sleight of hand, by focusing on Hersch's rather weak argument about the US seeking to close down Nordstream in order to make the EU reliant on US oil and gas. The real reason, was not to make the EU dependent on US oil, and certainly not gas, but rather to prevent it being reliant on Russian oil and gas, at least until such time that the US had again got a foothold in Russia, and control over its resources, at which point it would be happy to have the EU dependent upon US oil and gas companies operating out of Russia!
Politics follows economics, the greatest trade occurs between neighbours, and out of trade arises common interests, political alliances, economic and political blocs and unions, and even states. Germany has always had such a relation with its huge Russian neighbour to the East, as well as with its Western European neighbours in the EU, and the last thing that US imperialism needs is for the EU to develop its own economic and politico-strategic interests, separate from the US/NATO, using Russia as leverage, at the same time that the US is squaring up to China in the Pacific.
There is no shortage of statements from US representatives themselves to that effect. As Lazare notes in his WW article,
““If Russia invades Ukraine, one way or another NordStream will not move forward,” Victoria Nuland warned in January 2022. “If Russia invades … then there will be no longer a NordStream 2,” Biden added on February 7. “We will bring an end to it.” Nuland’s crack last month about “a hunk of metal at the bottom of the sea” provides further confirmation.”
And, he notes,
“Radosław Sikorski - member of the European parliament, former Polish foreign minister and husband of influential US neocon Anne Applebaum - tweeted: “Thank you, USA.” The tweet went viral because it confirmed what everyone already suspected - that the explosion had ‘Made in America’ all over it.”
Much as with the crude, economic-determinist arguments that tried to explain the Iraq War as being all about US greed for oil, being a weakness, so Hersch's argument about US oil and gas sales as motivation is also a weakness, and enabled Pirani to use it, whilst ignoring the real point that what the US really wanted was to prevent the EU resuming its purchases from Russia. In terms of oil, as Morse has described, the US did increase its sales to the EU significantly. Moreover, as far as the ruling class is concerned, it is not oil from the US that is important, but oil produced by companies in which they have large shareholdings, and from which they derive dividends, interest and capital gains, no matter where those companies conduct their operations. Biden was quick to try to get the Saudi butchers to increase oil sales, for example, but, as US imperialism's star is dimming, and as it reaps what it has sown from its own previous military adventures and behaviour, even that resulted in disaster, for him, as the Saudis simply showed him the finger.
The US, no doubt acted out of hubris in a belief that, faced with the overwhelming level of military hardware they were pumping into Ukraine, as they allowed the Ukrainians to act as their human battering ram, and acted with the mobilisation of its global propaganda machine, and all out economic warfare, Russia would be brought to its knees. But, they could be sanguine, when that didn't happen, because, as with the Iraq War, the war in Libya, and in Syria, its not the US that suffers the consequences, along with the peoples of those countries and regions, but the EU, whose borders are destabilised, that has to pick up the tab of massive numbers of refugees and displaced persons. It is the EU that has suffered the massive rise in energy costs, not the US. Its the EU that will end up pumping billions of Euros into trying to rebuild the bankrupt Ukrainian economy, draining those resources from the EU itself, and so weakening it relative to US imperialism.
The EU, still historically subordinated to US imperialism, also suffered from the same hubris, and no doubt believed that the injury it was inflicting on itself, in boycotting Russian oil and gas, would be short-lived, and more than compensated, if Putin was destabilised, and a western puppet put in place, again, as had happened with Yeltsin, when under US instruction, Chubais sold off state assets on the cheap, creating the present day state of oligarchs, and mafia capitalism, whilst Russian workers and pensioners were left destitute, and eating food scavenged from waste bins. It no doubt, saw the possibility of a great expansion to the East, and a bonanza of cheap and plentiful natural resources. Moreover, as it was forced to abandon the lockdowns of the previous two years, and as all of the money tokens handed to citizens flooded into the real economy, driving up inflation, a temporary period of sharply higher energy prices, to soak up that liquidity, rather than stimulating rapid economic growth, that threatened to crash asset prices, would do no harm for it at all.
But, its hubris was misplaced too. Despite hundreds of billions of Dollars worth of the most advanced NATO military hardware being dumped into the bottomless pit of Ukraine, it was still incapable of pushing Russia out of Eastern Ukraine. On the contrary, Russia consolidated its position further, dragging NATO and the EU into a never ending war, that will suck it dry. And, with global labour shortages, EU workers did not simply accept their fate of having to cover ever higher energy bills, and other cost of living rises out of their wages, but began to take to the streets, and to take industrial action for higher wages, instead. That was a game changer, because, now, it meant that those higher costs were becoming a direct reduction in profits, and as economies continued to grow, as all of the additional workers continued to spend, so interest rates rose, and that means that the assets that now form the main form of wealth of the ruling class, were set to fall sharply in price.
As EU firms faced squeezed profits, as workers demand higher wages to cover higher energy prices, as they face a squeeze on the rate of profit, as the cost of constant capital rises, and as they saw a growing mass mobilisation of those workers across Europe opposing those rising costs, and increasingly recognising that the cause of them was the boycott of Russian energy supplies, and sanctions, so the US must have been scared witless that EU governments would crack, and restore energy purchases from Russia, as indeed, they had been doing by the back door in buying Russian oil and LNG via China, all along.
That would break the EU from the US, and its gig would be up, handing an historic defeat to the US, and its global hegemony, at the very time it was gearing up for war with China. Its in that light that the statements from Biden, Nuland, and many others that Nordstream would be stopped have to be understood. And, of course, as Lazare notes, the imperialists could not allow any suggestion that it had been the US that was responsible, and had to mobilise all of their propaganda resources, and those of the social imperialists, because what would it say to the workers of Europe, for it to be admitted that US imperialism undertook an act of war against it, for its own short-term strategic interests?
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