Europe is winning the energy war against Russia
As the conflict in Ukraine simmers, Vladimir Putin’s Russia must also deal with the consequences of European sanctions, and Europe appears to have won the battle on the energy front.
According to the Kremlin, the invasion of Ukraine should have ended long ago. After the first three days of the occupation, Russia’s “short victorious war” was supposed to end with the installation of an occupation government and a parade in Kiev that would cement the legacy of the Russian president. Vladimir Poutineand the new-generation Russian empire of the Eastern Orthodox Slavs: Russia, Ukraine, and Belarus, in Tsarist jargon, “Great Russia, Little Russia, and White Russia.”
Instead, Russia’s invasion resulted in the greatest display of military incompetence since the fall of Saddam’s Iraqi army in 2003, but then it was the victorious superpower. Today, we are facing a regional army that has defeated the “second most powerful army in the world”. »
Russia’s geostrategic and economic failures are enormous: mass emigration (about 1,000,000 Russians, including many entrepreneurs, have left the country since the war began); economic dislocation and sanctions; diplomatic isolation; and a reinvigorated West. This is the real record of Russia and many of its leaders Nikita Khrushchev In 1964, he was impeached shortly after that.
Russia has also used its energy resources to pressure Europe, with one hope: high energy prices for Europe and low prices for its anti-Western rivals will force Europe to abandon Ukraine and lay down its arms and surrender to forces in Kiev. .
Russia hoped that the West’s increasing demand for domestic heating and industrial energy would give it political influence, especially as winter approached. However, Russia’s long-awaited polar winter did not come. Indeed, it experienced one of the warmest winters in European history. This warm weather, combined with a diplomatic and economic offensive based on pragmatic energy, greatly helped Europe.
Before the war, Russia was Europe’s main supplier of energy, including oil, uranium reactor fuel, natural gas and coal. 40% of gas is used to heat homes and supplies to businesses throughout the European Union (EU) came from Russia. Thus, Russia has become an important trade partner for the world’s richest countries, giving Moscow enough power. Moreover, Europe’s response to Russian aggression and war crimes, such as the 2008 invasion, occupation and annexation of Georgian territory, the 2014 annexation of Crimea or the occupation of Donbass and the downing of the MH-17 civilian airliner, were inexcusable failures. It emboldened Putin and encouraged him to invade Ukraine.
Even before the war, Europe and the United States had drawn up emergency sanctions that would hurt Russia’s energy exports and allow the West to cut off Russian gas. Russia reacted similarly, restricting its exports, which caused many, sometimes negative reactions in Europe. However, many critics failed to grasp the deeper meaning of this new situation, namely that Europe was rapidly replacing the bedrock of its economic architecture, and did not let ideological purity or appearances stand in the way. despite his effortsAngela Merkel.
How quickly Europe found alternative energy sources and successfully weaned itself off Russian imports surprised many, especially Russian leaders. Increasingly, Moscow will have fewer resources to finance the war. Falling incomes will hurt Russia’s middle class and expose it to the economic pain of Western sanctions. Without regime change in Moscow, there is little hope that Europe’s partnership with Russia will be restored after the end of the war. As inflation eases in the West and Europe readjusts energy policy, sanctions against Russia could become tougher and more damaging.
Russia has determined that conventional anti-Western or neutral actors cannot replace European energy markets. China’s promised “borderless friendship” has turned into an unwillingness to fund new energy partnerships. Beijing buys oil from Russia 30-40% discounts.
India, which is claimed to be the Kremlin’s panacea, has also changed its position as Russia’s only high-volume importer by making deep discounts. Even India buying 33 times more Russian oil in 2022 than in 2021 could not save Russia’s finances, especially as the Sino-Indian rivalry traps Moscow between a dragon and an elephant.
Russia’s former economic partners in Central Asia now welcome and compete with young Russians fleeing Russia in the energy market. Even former Soviet republics and Russia’s allies like Armenia are trying to escape Moscow’s orbit. In each case, Europe advanced its own energy diplomacy to augment Russia’s strategic mistakes. Today, Russia has only the most insignificant or false allies left: Belarus, the Central African Republic, Eritrea, Iran, Nicaragua, Tajikistan and Venezuela.
The predictable economic consequences show the extent of this failure. A recent ban on seafood imports from Russia cost Moscow nearly as much 160 million euros per day. Russia had two weeks before EU sanctions and a G7 price cap on Russian crude took effect lost 90% of the market In the northern countries of the Union. In December 2022, Russia saw revenues from fossil fuel exports fall to their lowest level since the February invasion. In 2022, the country’s annual inflation rate was almost twice that of the West (6.5% in the US) (11.9%), and its overall economy shrank as its deficit widened. At least the army is dealing with unemployment.
It is especially ironic that the real beneficiary of Putin’s failed geostrategic gamble is the United States. In 2022, the United States surpassed Russia as the supplier of gas to Europe. Most European leaders rushed to sign LNG export deals with the US, resulting in additional revenues. 1 trillion dollars For U.S. energy companies such as Cheniere Energy (LNG.A.) and TotalEnergies (TTEF.PA). The energy crisis has intensified cooperation between Washington and Brussels, leaving Europe almost disconnected from Russia and more dependent on the United States. With synergy, this new energy cooperation will strengthen the transatlantic alliance, which bodes well for Ukraine’s war effort.
Putin’s actions are unprecedented strategic blunders. The enormity of this disaster cannot escape even the supporters of the Russian nationalist occupation. Many believed that the Russian president would not make such a monumental mistake. Unfortunately, this reflected the consensus whipped up by television and Kremlin talking heads, and the Tsar believed his own propaganda and swallowed his bait. Like many others before him, he believed in invincibility and fate, indulged in the illusion of a “short victorious war”, a phrase that condemned Nicholas II. The work is not over, because Russia is determined to bring its army to 1.5 million men and send half a million more to the battlefield.
If the war does not end, Russia and Putin have already lost. Whatever the outcome, Russia has lost Europe’s energy market and a major source of income, and Europe has lost its dependence on Russian energy and is better off.
Article translated from US Forbes – Author: Ariel Cohen
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