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America's "secret" economic weapon: Can it contain Putin?

Aaron Task
·Editor in Chief

After Russia seized Crimea last month, America and her allies responded with sanctions against Vladimir Putin's inner circle -- and a lot of rhetoric.

“President Obama underscored to President Putin that the United States continues to support a diplomatic path in close consultation with the government of Ukraine and in support of the Ukrainian people with the aim of de-escalation of the crisis,” the White House said in a statement on March 28. “President Obama made clear that this remains possible only if Russia pulls back its troops and does not take any steps to further violate Ukraine’s territorial integrity and sovereignty.”

Fast forward to today: Russian troops remain on the border and poised to strike, according to analysis of NATO photos released Thursday. Meanwhile, pro-Russian protests in several Ukrainian cities could provide Putin a pretext to annex more territory. With the American people and our NATO allies showing little or no appetite for conflict, the conventional wisdom among the pundit class is the U.S. is powerless to fight Russian aggression. 

Related: Russia, China aiming for dollar’s demise: Jim Rickards

But America does have a secret weapon of sorts in its arsenal -- or at least one few observers are thinking about: Abundant supplies of oil and natural gas.

After Russia entered Crimea "something really interesting happened," recalls Russell Gold, The Wall Street Journal's senior energy reporter. "President Obama and the Department of Energy had a test release of the Strategic Petroleum Reserve and it pushed down oil prices. To me and many oil observers that was a very clear warning shot across the bow to Russia to say 'look we have enough oil right now we can push down prices' and that really hits Russia where it will hurt'."

The Energy Department said the test sale -- the first since 1990 -- was planned for months and had nothing to do with events in Crimea. But Gold, among others, is skeptical of that explanation.

"It's a little suspicious," he says. "Maybe it was planned, maybe it wasn't, but it feels like same thing you hear from Russia that they 'planned military exercises around border of Ukraine' before the invasion of Crimea.

Either way, the test sale sent a message that "the U.S. has so much oil right now it can use the Strategic Petroleum Reserve...to hurt or at least send a warning to other countries and then it can fill it back up again very easily because there's plenty of oil right now in the Gulf," Gold says.

In his new book, The Boom, Gold examines how fracking ignited an energy "revolution" in America, with the potential to change the world.

Related: Fracking has made the U.S. “the envy of the world”: Russell Gold

This episode with Russia could prove to be a critical test-case of how America can use energy "as a tool to accomplish foreign policy goals," he says. "Our whole policy -- if you can call it that -- was geared toward making sure we got the oil we needed, and we were gearing up to import natural gas. That's all changed now."

Aaron Task is the host of The Daily Ticker and Editor-in-Chief of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com.