What if Ukraine's situation escalates?

[specuvestor]

P.S. The last time I checked, US is still importing natural gas and crude oil. I have no idea who gave the politicians the silly notion that Europe can rely on imports from America instead of Russia.....

Off the top my head US NG price is lowest in the world and they will be finally allow NG export in 2015, though oil export is still largely banned. Buffett was hurt by US NG bet through Energy Future Holdings

I had the impression that US is now energy independent, but I could be wrong that it is a projection, and on the way to crude independent

Ask yourself, how much can Putin win by going further into Ukraine?

Yes, he might win the whole Ukraine. He will lose enormous economic value, possible his ruling of Russia. How much support will he get when most of the people are starving because of some nationalistic view?

He will lose the oil and gas revenue in Europe, replacing with lower pricing from China. Russia can't import from most of the countries in the world.

Russia are not in need of oil. Instead it exports oil to Europe and parts of Asia.

I do not think Russia will lose much economic value. Putin's plan on stranglehold of Europe started in his first presidential term in the early 2000s.

He built all the natural gas pipelines from Russia and ramify into tentacles into the European countries, inducing them to be dependent on Russia for natural gas.

If you read more about the Crimea crisis, major economic power in EU such as Germany were reluctant to impose sanction upon Russia due to its reliance on it for oil and gas. (More than a third of oil imported into Germany are from Russia.) Putin knows that and he explicitly spoke about it during the latest presidential Q&A session.

That being said, I think that Vladimir Putin is smart enough not to evoke vehement hostility from NATO and the rest of the world, but pinch them slowly and irritatingly. Hence, I do not think he will try to absorb the whole of Ukraine, yet.

Putin is seizing the day... he saw Obama's impotence in Syria and EU inaction. He is a very shrewd politician, almost a class of his own in the face of these new leaders except for Merkel, he will be maximising the gain from this. He already maximised his political capital with an open challenge to credit his salary into the banks that US sanctioned which arguably cost him little wealth, but speaks big on his challenge as well as morale booster to his team that he is with them. This is not a guy to mess with.