The U.S. and its allies need to prevent Russia from exporting oil and natural gas as an economic deterrent for its unprovoked invasion of Ukraine, Sen. Marco Rubio told CNBC on Tuesday.
On “Squawk Box,” the Florida Republican, a member on the Senate Foreign Relations Committee, cited two reasons why Russian President Vladimir Putin thinks he can get away attacking Ukraine: “No. 1 is oil and gas, and No. 2 is nuclear weapons. We’ve got to take one of those two away.”
Taking Russia’s nuclear weapons away isn’t really an option. In fact, Putin put his nuclear deterrent forces on high alert earlier this week.
That leaves sanctions. But until now, the wide array of measures taken by America and Western nations to pressure Putin have not included directly targeted Russian oil over concerns about sending energy prices even higher. U.S. and international crude prices on Tuesday soared to their highest levels since the summer of 2014, several moths after Russia reclaimed Crimea from Ukraine.
When asked whether Russia should be prevented from exporting its oil and gas as leverage in the current Ukraine crisis, Rubio said, “I think we can and we should.”
Canada said Monday that it would ban Russian oil imports, making it the only country to directly aim at Russia’s energy sector. Last week, Germany halted the Nord Stream 2 Baltic Sea natural gas pipeline project, which was intended to increase the flow of Russian gas directly to Germany.
Rubio also said he would like to see President Joe Biden use Tuesday night’s State of the Union address to encourage a U.S. return to pre-Covid pandemic oil and natural gas output levels.
“What I’d like to hear, I won’t hear, and that is the president announcing that America is going to get back into the business of aggressively producing oil and natural gas and exporting it as well … and that we’re going to do that in conjunction with a gradual reduction and ultimate elimination of imports of Russian oil,” Rubio said.
While Russia has not been a top supplier of oil to the U.S., imports from Russia have been increasing in recent years. “The U.S. needs to get back to that point that we were in 2019 and 2020, when we were exporting more than we were importing,” Rubio said, calling it “the ultimate leverage” against Russia. He echoed his call in a later tweet urging the U.S. to divert cash from “criminals like Putin.”
Rubio also told “Squawk Box” Tuesday the world needs to keep up the economic pressure on Putin. “We need to make sure those things are sustained.”
On Monday, Russia’s currency, the ruble, crashed under the weight of international sanctions. To try go halt the plunge, the Russian central bank raised its key interest rate to 20% from 9.5%.
The Russian stock market in Moscow closed Monday and remained so Tuesday. However, Russian exchange-traded funds continued to trade in the U.S., taking a beating over the past two sessions.