Oil is all that Putin has left, according to Amos Hochstein, the adviser to the president

According to Amos Hochstein, a special presidential coordinator for President Joe Biden, oil is all that is left of the Russian economy after the invasion of Ukraine earlier this year.

“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 what’s coming out of the ground. He’s not going to sell his gas to Europe anymore, so all he has is oil, so it’s funding this war.”

The Russian Embassy in the UK did not immediately respond to CNBC’s request for comment.

The Russian economy has shrunk 4% annualized for the second quarteretcCentral Bank of Russia expects the recession to deepen in the coming quarters. The International Monetary Fund expects Russia’s GDP to decline by 3.4% in 2022.

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

According to Eurostat, Russia was the largest supplier of both natural gas and petroleum products to the EU in 2021, but gas exports from Russia to the European Union fell this year.

“Despite the available production and transport capacities, since the beginning of 2022, Russia has reduced gas supplies to the European Union by almost 50% y/y”, according to the International Energy Agency.

Hochstein therefore 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 is the number one problem in the world today,” he said. “And 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 aligns 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 future of energy more broadly must be made “today.”

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

— CNBC’s Elliott Smith contributed to this report.