Washington’s Energy Gambit: Leveraging Russia to Starve China

Key points

• On October 9, the US Treasury issued a six-month waiver allowing Russian diesel sales, framed as a measure to lower fuel prices before the November 3 midterms.
• US control of Venezuelan oil exports has collapsed shipments to China, while the closure of the Strait of Hormuz has cut off Middle Eastern supply, making Russia China’s primary energy source.
• Reports indicate Washington and Moscow are discussing US investment in the damaged Nord Stream pipelines, potentially allowing Europe to resume Russian gas purchases without appearing to capitulate.
• The strategy mirrors Nixon’s 1970s approach but in reverse, seeking to pry Russia away from China by offering access to European markets and US oil companies.
• Critics warn the plan could raise global energy prices, fuel inflation, and destabilize Europe’s economy, while potentially ending the Ukraine war on terms unfavorable to Kyiv.

Background

This development follows recent US reversals on Russian sanctions and a shift in US-China dynamics, where Washington has recognized Beijing as a peer rival. Earlier coverage noted Trump’s waiver of new sanctions against Russia amid peace negotiations and a deterioration in relations with Ukraine. The current energy strategy builds on these shifts, aiming to reshape global power balances through resource control.

How outlets are covering it

OilPrice.com frames the strategy as a deliberate 'reverse Nixon' play to constrain China and enhance US power, emphasizing the potential for US ownership of Nord Stream to aid Europe. Anadolu Ajansı highlights concerns that the US pursuit of global energy resources echoes historical imperialism and risks undermining national sovereignty, while noting the IEA’s readiness to verify Iran’s nuclear activities. Marketscreener.com provides market context, showing oil prices climbing above $110 due to supply fears, but does not directly comment on the geopolitical strategy. The outlets differ in emphasis: OilPrice.com focuses on strategic intent, Anadolu Ajansı on sovereignty and verification, and Marketscreener.com on market impacts.

Why it matters

The strategy could reshape global energy flows, weaken China’s economic leverage, and influence the outcome of the November 3 midterms. However, it risks higher energy prices, inflation, and geopolitical tensions, potentially destabilizing Europe and the Ukraine conflict. The outcome hinges on whether Moscow accepts the trade-off of ending the Ukraine war for access to European markets.

What to watch

Watch for US investment in Nord Stream, further Russian diesel exports, and reactions from Europe and Ukraine. The November 3 midterms will test domestic support for the strategy, while ongoing negotiations with Moscow and Beijing will determine its success.