9 March 2022

Profits from fossil fuel energy power Russia’s war machine, and Ukraine suffers

The West's failure to comprehend Russian geopolitical power in the age of nuclear weapons has resulted in tragedy.

Photo by Gerard Malie/AFP via Getty Images

Nobody really believed that history ended in 1989 with the fall of the Berlin Wall or in 1991 with the dissolution of the Soviet Union. But given the previous eight decades of bloody catastrophes, the peacefulness of those events had such a phantasmagorical quality that they seemed to arrive from beyond the 20th century. The American diplomat George F Kennan, who formulated Washington’s containment strategy towards the Soviet Union, remarked in 1995 that in modern international history, it was “hard to think of any event more strange and startling, and at first glance inexplicable, than the sudden and total disintegration and disappearance… of the great power known successively as the Russian empire and then the Soviet Union”.

Now, as Russia’s army shells Ukrainian cities, and hundreds of thousands of Ukrainians flee westwards, the history of that period is revealing itself as part of a longer continuum. The narrative that prevailed about the West’s triumph in the Cold War – that it was down to the superiority of democracy as an idea and system of government – was not entirely misplaced when explaining the 1989 uprisings in eastern Europe (even if it disregarded the role of nationalism and religion in those rebellions). But the geopolitical causes of the Soviet Union’s fall were ignored. From the early 1970s to the late 1980s, the Soviet Union was the world’s largest oil producer. The Soviet crisis began when Saudi Arabia crashed oil prices in 1986 to increase Riyadh’s market share. Tumbling oil prices wrecked the Soviet state’s finances, making food imports dependent on Western credit. Within less than two years, the Soviet Union was withdrawing from its military adventure in Afghanistan and a Popular Front was demanding independence in Estonia. A year later, Mikhail Gorbachev offered no resistance to the revolts in eastern Europe.

The age of Soviet energy power was marked by an expansion of Soviet martial force and political influence in mainland south-east Asia, Afghanistan, southern Africa, Ethiopia, and South Yemen. During these years, the Soviet Union also became a significant exporter of gas to west European countries. By the early 1980s, officials in the Reagan administration were convinced that it was hard currency earnings from these sales that allowed the Soviet Union to project military power abroad. They also predicted that the absence of that money would have decisive strategic consequences.

But the collapse of the Soviet Union did not end Russian power. Since Russia retained nuclear weapons, any military response by Nato to future Russian aggression still risked unconscionable escalation. When energy prices rose prodigiously in the 2000s, Vladimir Putin was able to restore Russia’s geopolitical power with an enormous bonus: China’s need for foreign oil and gas created a huge new market for Russian energy exports.

By the early 2010s, Moscow’s state coffers had been refilled with energy revenues, making Russia an expansive force once again. Meanwhile, its energy power has weakened the West’s capacity to respond to its aggression abroad. Some European countries, such as Germany, have left themselves little choice but to buy Russian gas. Through its alliance with Saudi Arabia since 2016, Russia has also acquired significant control over oil prices. While the volume of Russian oil exports has fallen since the invasion and import bans have been announced, the Russian oil that is being sold is trading at around $130 a barrel, more than two-and-a-half times the price when Russia intervened in Syria in September 2015. To assume, as Barack Obama’s administration did, that because the Russian economy is based on energy Moscow can’t exercise serious power spectacularly misunderstands a key lesson of 20th-century history: the production and control of energy resources create geopolitical power.

Regarding Ukraine, the West’s failure to take Russia’s power seriously was tragically irresponsible. By building pipelines under the Baltic and Black seas, Putin sought to remove Ukraine entirely from the transit of Russian gas to Europe. If he did not quite succeed – he conceded transit will continue through Ukraine until at least 2024 – Putin has inflicted significant damage on Ukraine’s economy. The EU largely acquiesced. Outside Poland and the Baltic countries, few were willing to see that accepting the transit of gas through Ukraine was a necessary condition of that country’s independence in a world in which Russia has nuclear weapons.

Moral pieties about democracy as a European value are politically meaningless without a willingness to use military power against Russia when it invades a European country. This will was absent when the Soviet Union deployed its tanks against Hungary in 1956, even before the Soviets had the weaponry that entail Mutually Assured Destruction. It was missing again over Czechoslovakia in 1968, when the dread of nuclear Armageddon had become manifest. By the time General Jaruzelski put Poland under martial rule in 1981, west European countries had become too dependent on Soviet energy exports to contemplate the kind of sanctions that might have forced the Kremlin to compromise with the Solidarity movement. Now, it is Ukraine’s turn to pay a horrible price for the West’s inability to comprehend Russian geopolitical power in the age of nuclear weapons and fossil fuel energy.