'US Sanctions on Russia May Backfire and Hurt Global Economy' - Market Analyst

© AFP 2023 / MLADEN ANTONOV The US Congress building. (File)
The US Congress building. (File) - Sputnik International
US oil and gas firms are lobbying against tighter sanctions on Moscow as the US Senate is considering a bill, called DETER, that would allow for more sanctions against Russia in the future. Sputnik discussed the lobbying efforts of US oil and gas firms with Phil Flynn, senior market analyst at Price Futures Group.

Sputnik: In your view, why did the US oil and gas companies come out against additional sanctions on Russia?

Phil Flynn: You know, I think it comes down to dollars and cents. They actually believe that more sanctions on the Western oil industry are really going to do little to change Vladimir Putin's behavior and, at the same time, really put the US and international companies at a disadvantage. There are some times where sanctions can be very effective on certain governments to change their behaviors.

But other times, if you're just lashing out and putting on sanctions just to show that you're upset about something and not thinking about the larger consequences for the global economy, Sometimes maybe you should step back. There may be a better way to send that message, other than sanctions on the oil and gas industry.

READ MORE: US Congress Willing to Consider New Sanctions on Russia — House Speaker Ryan

Let's face it — it is going to be facing a lot of issues; whether it becomes new sanctions on Iran, the possibility, of course, of falling production in Venezuela, ongoing strife in Libya… So around the globe we really can't afford to lose too many drops of oil and I think sanctions on Russia may backfire and hurt the global economy.

Sputnik: How likely is the US Congress to take these companies' opinions into consideration?

Phil Flynn: I think that they are going to take into account what they are saying right now. I think right now they are going to look to see if there are any other issues with Russia. I think ahead of President Trump having Putin in Washington, [it] probably would be counterproductive to put these sanctions on.

READ MORE: US Oil Companies Allegedly Lobbying Congress Not to Ramp Up Russia Sanctions

So I do think the Congress may down when it comes to new energy sanctions on Russia. That doesn't mean that they wouldn't come up with some other type of sanction or punishment for Russia to show their displeasure with what' happened during the last elections.

Sputnik: Reports say that US companies were pushed aside from doing business in Russia, while their rivals received an unfair advantage following sanctions. Is that your take on it as well?

Phil Flynn: I think, at some point, the answer is "yes." You know that there are a lot of US companies that have invested in Russia; Russia's infrastructure and at the end of the day, by being pushed aside, not allowing [them] to do their business, it really does help people, who are not necessarily friendly to our cause.

READ MORE: Israel Can Pressure US to Lift Russia Sanctions if Iran Leaves Syria — Journo

At the end of the day, when it comes to oil and energy, it is really a global economy. Sometimes when you sanction another country on energy you end up hurting yourself and your own economy. So sometimes I think you encounter what is an effective deterrent for bad behavior and at this point, the US energy companies definitely think that sanctions on the US-Russia energy sector is probably not the best way to send that message.

The views and opinions expressed are those of the speaker and do not necessarily reflect those of Sputnik.

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