Presidential advisor Amos Hochstein says oil is all that’s left for Putin

Oil is all that’s left of the Russian economy after its invasion of Ukraine earlier this year, according to Amos Hochstein, President Joe Biden’s special presidential coordinator.

“Oil is the only thing they have left in this economy… Putin has destroyed the rest of the economy,” Hochstein told CNBC’s Hadley Gamble on Monday.

“All he has left is stuff that comes out of the ground. He won’t sell his gas to Europe anymore, so all he has is oil, and that’s what finances this war.”

The Russian Embassy in the UK was not immediately available to respond to comments when contacted by CNBC.

The Russian economy has shrunk due to 4% year-over-year compared to the second quarterWhatIt is the Central Bank of Russia You expect the slowdown to deepen in the coming quarters. The International Monetary Fund expects Russia’s GDP to shrink by 3.4% in 2022.

Hochstein’s comments from the ADIPEC conference in Abu Dhabi come at a volatile time for energy markets in the wake of the Russian invasion of Ukraine in February 2022.

Russia was the largest supplier of both natural gas and petroleum oils to the European Union in 2021, according to Eurostat, but gas exports from Russia to the European Union have fallen this year.

“Despite the available production and transportation capacity, Russia has reduced its gas supplies to the EU by nearly 50% year on year since the beginning of 2022,” According to the International Energy Agency.

As such, Hochstein stressed the importance of acting now to ensure a safer environment for the development of future technologies in the energy sector.

“Fortunately or unfortunately, energy today is the number one issue in the world,” he said. “You know, we’re talking about oil and gas here, but the energy transition — look what we just went through in the United States, The largest climate investmentWhich fits well with what countries like the UAE and some other countries around the world are doing.”

He added that these investments, in supply chains and the energy future more broadly, should be made “today”.

“So that we don’t end up with the same energy geopolitics of renewables and electric cars as in the 20th century for oil and gas,” he added.

– CNBC’s Elliot Smith contributed to this report.