High Oil Prices Aid Anti-American Regimes in Russia, Iran, and Venezuela.

Some key anti-American governments are highly dependent on oil revenues. A large portion of the budgets of Russia, Iran, and Venezuela depend on money from oil and natural gas. The United States consumes the most oil of any country in the world. If demand for oil and other fossil fuels in the United States were cut dramatically, their prices would fall, and that would sharply curtail the activities of our adversaries. Should we send more troops overseas to curb the bad behavior of these regimes, or, instead spend that money on switching our economy from fossil fuel dependency toward an economy built on renewable energy, and thereby deprive these regimes of a substantial part of the revenues they need to continue their anti-American activities?

Transitioning the American vehicle fleet from using fossil fuels to electricity will be a major step in that direction. Ford made news last month when it announced it will begin production next year of the F-150 Lightning, all-electric truck. As an added plus, the truck’s batteries will be able to power your house during an electric outage. There are also plans to integrate its Intelligent Backup Power system with a solar company to provide solar power to both charge the truck as well as your home.

At the moment, one of the drawbacks of an electric vehicle is the limited range of its batteries, which typically provide a range of 250 miles on a single charge. One solution already under way is the creation of a network of fast-charging vehicle battery stations by Tesla, local utilities (such as Evergy in Kansas City) and a growing number of private providers such as EVgo.

Another solution is to buy the electric vehicle, but rent the batteries. This significantly reduces the price of the car, but requires a rental payment. The advantage is that when your battery power runs low, you just stop at the highway service station for ten minutes to swap out the low-power batteries for renewed fully-charged ones. This greatly extends the driving range of your electric vehicle. This battery rental plan has worked well in Israel and other countries that have tried it. It may work even better in the USA where we often drive great distances, especially on holidays.

Economists generally tend to oppose most tariffs in favor of free trade. However, in matters of national defense some tariffs may play an important role. In particular, a tariff on imports of crude oil and gasoline could substantially reduce American demand for these commodities. This would drive down their prices on world markets and deny our adversaries the revenues they need to continue their anti-American campaigns. It would also increase the demand for electric vehicles in the United States.

Even if you believe that global warming is a hoax, but care about national defense, taking advantage of our adversaries’ weakness is just common sense. A tariff on crude oil and gasoline imports would be a good start. Tax breaks for wind, solar and other renewables could create new, higher-paying jobs and contribute to economic growth, instead of sending more soldiers to fight in those never-ending Middle Eastern conflicts. Vladimir Putin doesn’t want you driving an electric vehicle. He needs you to keep driving your gas-guzzling car or truck. Putin will be very annoyed and disappointed with you if you purchase one of those recently announced electric Ford F-150 Lightning trucks or any other fully-electric vehicle.

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5 thoughts on “High Oil Prices Aid Anti-American Regimes in Russia, Iran, and Venezuela.

  1. Venezuela, which has the world’s largest-known reserves of oil, has been under US oil sanctions since 2019. They were imposed shortly after Maduro won re-election in a vote widely regarded as rigged. His socialist regime is blamed by many for the endemic corruption and economic mismanagement in Venezuela, which has resulted in about 4 million people fleeing the country.

    It was therefore a significant development when a delegation of senior White House officials traveled to Caracas on March 5 to meet Maduro. It was the first high-level talks between the countries in years.

    Although details of the meeting have not been fully disclosed, it is thought the delegation discussed steps toward easing sanctions and helping Venezuela to increase oil production, sources familiar with the matter told the Wall Street Journal.

    Felix Plasencia, Maduro’s foreign minister, said US oil companies would be welcome to return to Venezuela, “if they accept that the only, and legitimate, government of Venezuela is the one led by President Nicolas Maduro.”

  2. In Iran’s case, this would mean expediting the revival of the 2015 Joint Comprehensive Plan of Action, also known as Iran nuclear deal, from which President Donald Trump unilaterally withdrew the US in May 2018 and reimposed sanctions on Tehran.

    As a result of the US-led embargo, Iran, which pumped an average of 2.4 million barrels of oil a day in 2021, has been unable to sell even half of what it produces.

  3. Do you all want to defeat Russia in some way?) Is it really not clear that absolutely nothing harms our state?

  4. More oil produced anywhere in the world will tend to drive down oil prices and hurt Russia, particularly when that oil is produced outside of Russia. It is also true that less demand for oil will drive down oil prices and hurt Russia. Even if we produce all of the oil we need, the price of oil in the USA, which is the WTI (West Texas Intermediate) price (currently just below 70 dollars a barrel) is closely related to BRENT (the international price of oil) price (currently just over 70 dollars a barrel). The BRENT oil field is in the North Sea just off of Scotland. The difference between the WTI price and the BRENT price is related to the transportation cost between where supply is the greatest relative to where demand is the greatest. Environmentalists will prefer lowering the demand for oil, while people who think that climate change is a hoax may prefer increasing the supply of oil. Either way, Russia, Iran and Venezuela will have less revenue and need to cut back their activities.

  5. Lawrence,
    I thought the US was becoming energy independent during the Trump administration, producing most of the oil we were consuming, and therefore not dependent on foreign sources anymore. Then Biden came in and started changing that with the Green energy policies, shutting down pipelines, etc.

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