In the waning days of 2014, U.S. President Barack Obama’s approach to foreign policy, roundly castigated by critics for most of the year as being weak, feckless and indecisive, appears to have been vindicated by more recent developments. Eschewing the calls for immediate reactions to a series of disparate events—from anti-government protests in Venezuela to Russia’s intervention in Ukraine—the president opted for diplomacy and sanctions, augmenting his existing approach to perennial problems like Iran and its nuclear program. Now, the story goes, a whole list of U.S. opponents, from Cuba to Iran, are moderating their defiance of Washington and looking for ways to negotiate settlements. Even Russia has now agreed to restart talks to settle the Ukraine crisis.
How much of this is due to U.S. policy, however, and how much can be attributed to the collapse of global energy prices? Former Russian Finance Minister Alexei Kudrin recently opined that between “25 and 35 percent” of the reason for the dramatic decline in the value of the ruble—a very public symptom of the ailing Russian economy—could be attributed to Western sanctions. In assessing Cuban President Raul Castro’s willingness to normalize relations with the U.S., former Mexican Foreign Minister Jorge G. Castaneda specifically cited “the recent collapse in the price of oil” and how this has negatively affected the “two countries . . . on which Cuba has historically depended to keep its economy afloat: Russia and Venezuela.”
U.S. sanctions, particularly financial measures that target a company’s or country’s ability to conduct transactions in U.S. dollars, certainly have had an impact, along with measures designed to cut off access to American technology. Yet it took the floor falling out from under global oil prices to deliver the one-two punch that is now creating real problems for Caracas, Tehran and Moscow. Earlier this summer, when energy prices were high, a national champion like Russia’s Rosneft could scoff at what were being described as ineffective Western measures by attempting to presell oil as a way to bypass limits on Western lines of credit. Now, the collapse both in the ruble’s value and in the price of oil raises questions about Rosneft’s ability to pay its debts.