Moralism versus energy imperatives

The declared doctrine of America’s energy security is to diversify its sources of oil and gas worldwide
Last Updated 12 May 2022, 02:51 IST

The Russia-Ukraine war has reminded us again that the lever of international diplomacy is not moral but material. It is also clear that Russia is important in the world’s energy mix. So important that the dependence of countries on Russia is in itself a diplomatic victory. Russia is the world’s second biggest exporter of crude oil after Saudi Arabia (in 2019, 48 countries bought Russian crude oil worth $123 billion). So, amid pressures to maintain distance from Moscow over the invasion of Ukraine, India’s decision to take advantage of discounted prices to ramp up oil imports from Russia looks right, if one keeps in mind how, along with international diplomacy, a steady stream of righteousness and hypocrisy flows parallelly. After the US and China, India is the world’s third-largest consumer of oil, over 80 per cent of which is imported. India just cannot afford to look prim at the cost of its energy security.

European Commission President Ursula von der Leyen recently said Russia’s war on Ukraine was a stark reminder that the dependency on Russian fossil fuels is not sustainable, while pitching for deeper cooperation between India and the EU to expand the use of clean energy. The EU is more dependent on Russian energy, importing 27 per cent of its oil from that country. According to the International Energy Agency (IEA), a Paris-based agency gathering 31 mostly industrialised countries and much of the EU, Europe is the destination for nearly half of Russia’s crude and petroleum product exports. In 2021, two-fifths of the gas Europeans burned came from Russia. European leaders are naturally in two minds as they have to choose between the moral call to isolate Russia and the imperative to protect their own economies from high energy prices while going ahead with an embargo on Russian supplies.

The declared doctrine of America’s energy security is to diversify its sources of oil and gas worldwide, though it is a potential energy superpower itself because of its large shale gas reserves. Why must India be denied its right to source its oil supplies from a host of sources?

While, in 2021, India bought about 12 million barrels of Urals oil from Russia, around 2 per cent of its total imports, as per Kpler, a commodities research group, the largest supplies came from the Middle East, with considerable quantities pouring in also from the US and Nigeria.

Though India’s oil imports from the US have gone up significantly since February, according to analysts at Refinitiv, with the US having to depend upon its own oil production and helming the bandwagon of replacing Russian supplies, this arrangement looks unsustainable. India’s search for a transaction system based on local currencies, for instance, in roubles in lieu of dollars or euros, is sure to irk the US as it might “prop up the rouble or undermine the dollar-based financial system”. Proposals to resume trade with Iran under a barter mechanism which Indian oil refiners could use to buy its oil, an arrangement that had stopped three years ago, when the US re-imposed sanctions on Iran, are already afoot.

Bigger countries, history tells us, fought bloody wars over resources. One of the reasons Russia went to war in Chechnya was the reaction to perceived geopolitical threats from the West in the shape of the Baku–Tbilisi–Ceyhan pipeline. Proposals for this pipeline, projected to ship newly discovered oil from Azerbaijan to Turkey and so bypass Russia, were perceived by many as an attempt to cut Russia off from the Caspian and its oil. The US administration made no bones about the fact that the pipeline and its policy in the Caucasus in general were aimed at loosening Russia’s grip over the newly independent republics. When the expansion of NATO to former Soviet republics was being mooted for the first time, the emergence of the US-backed Ukraine–Georgia–Azerbaijan axis was perceived as a serious provocation by the Russian establishment. It rightly calculated that an independent Chechnya would have fitted squarely into this axis with the potential to significantly diminish (by disrupting the Baku–Novorossisk pipeline) the possibility of transporting Caspian oil through Russia. Russia has given the world sufficient evidence that as long as it perceives a threat to its interests in the Caucasus and Central Asia, on which America also keeps a hawkish eye, it will continue to take a military posture.

The instance of the American confrontation with Iran did show that by attempting to isolate Iran – home to some of the largest deposits of gas and petroleum on the planet – the US in fact undermined its own power. With global energy demands at an all-time high and supplies becoming increasingly inaccessible, Iran’s oil and gas lured its allies such as Pakistan and India away from American influence, besides laying ground for China, eager not only to fully exploit Iran’s natural resources but also giving way to a new alliance of countries liable to act as a counterweight to US global power. America, by pursuing a hostile agenda to a country with so much petro-clout such as Iran erred as much before as it is doing now in the instance of Russia.

Why does the world look so unevenly poised when it comes to energy security? The point is that international diplomacy has always been dependent on natural resources, be it Saudi oil, or Russian gas. In 2020, among the 10 largest oil producers in the world, the US came at the top with 18.61 mbpd, followed by Saudi Arabia with 10.81 mbpd, Russia with 10.5 mbpd, Canada with 5.23 mbpd and China, not to be outdone, with 4.86 mbpd. Both Russia and the US, holding the largest reserves among non-OPEC countries, are overly sensitive about their circle of influence. In fact, the battle of attrition over command of natural resources between the superpowers and the countries struggling to safeguard their existence, sharpened further by an enormous imbalance of trade, technological prowess and military might, allows no room for a moral stand in a Darwinian world hungry for energy.

(Published 11 May 2022, 17:31 IST)

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