Cramer and Dicker: Downing of MH17 Has Coincidences Benefiting Putin and Russia's Economy
NEW YORK (TheStreet) -- I was talking to Jim Cramer today about the downing of Malaysian airline flight 17 and the increasing tensions in Ukraine that are impacting upon the oil markets.
The strong Russian hand print on the tragedy strikes me as a coincidence that runs alongside a number of other facts that relate directly to the energy situation in Europe and the prices of oil worldwide.
A second round of U.S. sanctions directed at Russia focused ostensibly on the banks, but the prime bank targeted was Gazprombank, the financial arm of the largest Russian oil company. This round of sanctions was clearly directed against the Russian oil machine, the prime driver of the Russian economy.
Oil had been sinking slowly towards $100 a barrel before the plane was downed, and sub-$100 oil is an economic burden on the Russian petro-state, even more than the 7% drop in the price of the Russian stock market caused by the increasing sanctions.
While Europe cannot follow suit in applying sanctions on Russia because of Europe's dependence on Russian natural gas, there is a pro-EU government now sitting in Kiev that continues to reach out for support from Europe in fighting the Russian-backed rebels in the Eastern provinces.
The fact is that oil has strongly rallied since the airliner’s downing and Europe is again showing fear and forbearance in front of Russian natural gas, still representing 60% of the EU's demand.
If the downing of MH17 was a mistake -- and it still most likely was -- the results of the tragedy represent more than a few "happy" results for Vladimir Putin and his Russian thugs. A sobering thought, indeed.
I talk more about MH17 and the European oil markets with Jim in the video above.
At the time of publication the author had no position in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.