McGill Policy Association

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War Pigs: Petropolitics and Globalized Conflict

https://www.nytimes.com/2022/06/24/business/russia-oil-china-india-ukraine-war.html

On February 24th, 2022, the western world held its breath for the first time since the attacks of September 11th, 2001. Under the leadership of perennial Russian President Vladimir Putin 200,000 Russian soldiers were sent to neighboring Ukraine. Described by Putin as a “special military operation,” this kind of invasion has not been seen in Europe since German forces marched into Poland in 1939. 

Since the start of the conflict, Russia has faced far more adversity than expected. Only one month after the invasion Putin began to scale back the Russian insurgency. Russia’s supply lines and resources were beginning to fail, and the Ukrainian defense was proving stronger than anticipated. As a result, Russia pulled back from Kyiv and Chernihiv. Later in November Russian logistics were further placed on their back foot when Western armaments began to arrive on the Ukrainian side. An American-supplied and newly confident counterattack destroyed Russian logistical hubs and storage facilities while forcing a retreat from Kherson

With logistical supply chain issues and corruption at the core of their problems the Russian position and their international perception have consistently regressed. Their weakened position and the imposition of international sanctions have introduced questions about how Russia is funding their insurgency, the shift in Russian trade relations and how the lingering conflict will benefit certain parties.

NATO and other Western nations have attempted to isolate Russia by imposing sanctions on Russian exports. The goal was to punish Russia’s economy and by doing so undermine its war effort. However, since the sanctions were imposed by the United States, the European Union and the United Kingdom, the value of Russian exports, specifically crude oil, has risen, as it has since they began the war with Ukraine. This increase has revealed two notable adverse effects of the West-imposed sanctions that both frustrate and scare Western officials. Russia does not need the West to fund its war campaign, and by forcing Russia to look elsewhere, sanctions have expedited the formation of a newly aligned geopolitical resource alliance in the East

Specifically, India and China have purchased large amounts of Russian crude oil, and while this may make economic sense from a resource acquisition standpoint, it simultaneously makes them Russia’s most prominent financiers. For Russia, crude oil has become the currency of this war, heavily impacting the continued supply of bombs, guns, and gear to the Ukrainian battlefield.  

Importing Russian crude by China and India has resulted in a realignment of trade relations and geopolitics. Both countries are now more aligned with the Russian cause than before. China and India need oil, and Russia has an abundance of it. Russia sells oil thirty percent below the global price average to maintain its business while still generating significant profit as global prices have skyrocketed due to inflation.

Given their growing lack of political alignment with the West, China and India have made the most economically sound decision to continue to fund Russia. Russian oil helps both nations handle inflationary and importation issues, and their need for the cheapest oil allows Putin to continue his autocratic war effort. This domino effect will only escalate into 2023 as European sanctions on Russian crude grow stronger. The development of this geopolitical and trade alignment between three of the largest non-NATO countries is a direct result of the West- imposed sanctions meant to stop the war. 

International relations are just one sector changing due to the conflict. While the West projects an all-around anti-war agenda in politics and government, private gas and oil interests in the United States jumped at the opportunity to take over Russia's spot as Europe's most significant resource distributor.

One day after the first invasion of Ukraine, a letter by LNG allies, a Western based gas interest group, was sent to the White House arguing for an increase in natural gas extraction on public lands in the United States. The idea was to seize an opportunity to replace Russia and Europe’s gas supplier in anticipation of the European sanctions. It did not take long for the supposedly environmentally conscious White House to turn the gas industry's suggestion into policy. These policies include: rapid expansion of the U.S energy sector; increased drilling on public lands; expedited construction of gas export terminals; government pressure to approve pending new pipelines.

This policy opposes the Biden administration's promise to tackle the climate crisis while simultaneously demonstrating his willingness to capitulate to big business interests. This has set back American climate change efforts and invited the gas industry to continue to profit from a devastating humanitarian conflict. Alternatively, the policy does present a more immediate and relatable upside. As a result of the legislation the price of oil-related goods has drastically decreased easing the strain of the war on everyday consumers. Despite its negative repercussions the government’s choice to align with oil and gas interests has resulted in a temporary fix to America's most immediate economic problems. 

Europe’s most significant war since the 1940s has prompted a realignment of the international system in terms of energy allegiances and trade politics while also significantly impacting energy policy in North America. Given the newly formed energy alliance in Asia and the weakening of Biden’s climate change convictions, it is safe to say this conflict has had a notable effect on global policy. The effects of the Russia Ukraine conflict have demonstrated that in a globalized world, a regional war yields global consequences.