Friday, May 4, 2012

Deanna Wotursky unit 10

Russia exports large amounts of all types of natural resources, but their biggest money maker is oil. According to the article, “Russia is now the world’s largest oil producer, pumping about 10 million barrels of oil a day.” Russia has openly condemned the west for sanctioning Iran oil, but they mustn’t have realized they would benefit from Iran’s losses. This is simply Russia accidently stepping into a zero-sum game. The economic sanction the west plans to impose on the Iranian oil industry has led to increased gas prices and inflation for importers already, but has done the opposite for Russia as the main exporter. The Russian pipelines leave countless trade possibilities because they run to both Europe and Asia. The economic prosperity of Russia has helped bolster the image of presidential candidate Vladimir Putin in the eyes of the Russian nation. The competitive authoritarian nature of the Russian regime opposes most involvement in the internal affairs of sovereign countries, and therefore condemns the west for using coercive diplomacy to get what they want. If Russia didn’t or did know these sanctions would benefit them economically, and Putin politically I feel Russia would continue to stand behind their decision and stance on Iranian economic sanctions. The petroleum sanction on Iran has already affected the global economy and it doesn’t even take effect until the summer. The increased barrel prices on gas have caused inflation of gas prices in return inflation of consumer goods for the United States. This isn’t the case in Russia, when oil prices go up the Russian nation benefits because, “The extra money has helped to further subsidize domestic energy consumption, tamping down inflation” also, the article goes on to say that “In the United States when oil prices go up , the president’s ratings go down. In Russia, it’s the opposite.” The current political unrest in Russia towards the Putin regime has deplored doubts on the legitimacy of the goals of the regime. These doubts are relinquished when the bigger goals of the regime are met to better the state, like economic prosperity. Lastly, Iranian and Russian oil have very similar components which will spark trade interest s with countries who will adopt the sanctions against Iran in the summer. Trade agreements can strengthen state to state relations if the trade agreement is positive for both parties. The pipelines will not only serve as way to trade with more countries but will lower the cost for Russia to produce and deliver oil as well.

No comments: