Russia-Ukraine Conflict and Global Oil prices

Article first published in The Nation on 19-Feb-2022. Article being published on with the consent of writer.

World is transiting from existing to new global order and in the process, great powers are at odd with each other and also in search of their future roles, hence playing their cards accordingly. World sole super power and leading economy, US is not fully in control of global affairs thus trying to create a narrative to reassert itself. China, a rising super power and second largest economy, is making a headway to fulfill its dream of belt and road initiative. China is expanding its influence through trade in middle east, Africa and Europe. India is struggling to find its foreign policy objectives and is marginalized to play its role in south Asian regions.  

Russia role in global politics is very unique. Russian is great power which in previous years has repeatedly demonstrated that it holds the capability to destabilize the international order. It’s recent build up in Ukraine, and arms sales and military engagements to build ties with countries in various parts of the world especially the Middle East also proves its prowess.  Its military strength is the main support of its great power claim. It has a considerable capacity for what might be called “nuisance power” around its fringes and in cyberspace but has few economic or ideological tools at its disposal.

Russia-Ukraine conflict is focus of the world. Present move of Russia to move its military troops on Ukraine border has resulted into substantial surge in oil prices which has put US and EU under pressure because Russia is biggest exporter of oil to EU particularly Germany.

Western press is abuzz that Russia is about to invade Ukraine. Russia denied this claim and said its troops have completed military exercises in Crimea and are now withdrawing back to barracks. US President and EU General Secretary don’t agree with Russian claim of de-escalation of its troops. These statement resulted into raise oil prices by 3.2%, $ 95 a barrel. The statement of Robert Yawger, vice president of energy futures at Mizuho Securities endorsed the US President statement which worked as catalyst to increase oil prices. Investors have been very sensitive to the risk that an invasion of Ukraine would disrupt Russia’s vast energy supplies at a time when global supply is already failing to keep up with demand.

Russia is second largest oil producer and caters for 35% of its natural gas supply to EU. A large amount of that supply goes through Ukraine. US has already started preparing for  alternative of energy supply to Europe incase Russia invade Ukraine.

Meanwhile EU is considering to increase the number of battle groups to militarily counter the Russian invasion if it happens. There are already four battle groups in Estonia, Latvia, Lithuania, and Poland. UK, Candana, Germany and US are leading these battle groups which are formed outside Ukraine.

Russian is threatened from eastward expansion of Europe and have thus been keeping Ukraine away from getting  entry into EU. President Putin wants Ukraine to abandon its western course and look towards Russia. But this desire of Russia does not seem to be working so far. Russia’s seizure of Crimea and its role in the conflict in Donbas  has claimed more than 13,000 lives, till date.

Ukraine is sandwiched between EU encouragement and Russian demands. Eastern provinces of Ukraine are already under Russian influence. EU has the potential to ignite a movement as was done in 2014, revolution of dignity. In 2005 also Ukraine witnessed a revolution. On both occasions Ukrainian people rejected the supremacy of Russia and desired to join EU. Russia responded by annexing Crimea and support separatists in the southeastern provinces of Donetsk and Luhansk in Ukraine. History of this region goes back to 1200 years when Ukraine, Russia and Belarus were born on the banks of the Dnieper River, in Kievan Rus, a medieval superpower that included a huge chunk of Eastern Europe. Russian President claim Ukraine part of Russian civilization but Ukranian reject this claim.

The U.S. administration and the European Union have asked other countries such as Qatar and Japan to help provide extra liquefied natural gas (LNG) shipments. US has already stated that if Russia attacked Ukraine, sanctions will be be imposed on Russia. For several months now, Russian gas flows to Europe have been lower than usual. Europe relies on Russia for around 35% of its natural gas. Most of this oil comes through pipelines including Yamal-Europe, which crosses Belarus and Poland to Germany, Nord Stream1, which goes directly to Germany, and via Ukraine. Russian move of troops might be a pressure tactics for approval of Nord Stream2. Russia’s Nord Stream 2 natural gas pipeline will increase Russia’s natural gas export capacity directly to Germany, bypassing Ukraine, Poland, and other transit states. Pipeline construction is complete, but it requires certification from German regulators before it becomes operational. US is not supportive of this arrangement against wishes of Germany and it has resulted into delay in operation of Nord Stream 2 which lies alongside the Nord Stream 1 pipeline. Nord Stream 2 will enhance the capacity of the Nord Stream system, from 55 billion cubic meters (BCM) to 110 BCM per year. The pipeline is owned by the Russian state-owned energy company Gazprom. About half the cost is financed by five European companies: Engie, OMV, Shell, Uniper, and Wintershall. Nord Stream 2 will provide a leverage to Russia over European energy security which is not acceptable to US.

Though China is equally affected due to raise in oil prices but it has opted to remain quiet due to its strong ties with Russia.  Russia and China has good relations and common interests. Common interests of both countries look towards weakening the across Atlantic partnership, countering the US soft power, undermining european togetherness and challenging US hegemony. It is alliance of convenience. Both countries have heavily but cautiously invested in each other.China and Russia don’t interfere with each other’s interest on regional issues.

So, it is a series of actions and reactions to have strategic leverage in the structuring of new world order. Russia may not invade Ukraine but OPEC sure have invaded the world economy through raise in oil prices. It is not first time that OPEC is using oil prices for political gains. These global decisions do affect the domestic political environment and result into inflation which comes to affect the life of a common man.


Writer is PhD in International Relations from QAU and can be reached at

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