How to Eat Russia’s Oil Lunch
If Russia is set to remain aggressive and dangerous, the best strategy to counter it should aim to reduce its share of the global energy market as much as possible. Assembling a coalition to do this is made easier by the shared incentive to curtail the country’s oil influence.
CAMBRIDGE – A funny thing happened on the way to net zero. While environmental, social, and governance standards were forcing oil companies to divest from fossil fuels, and while the United States was tightening its oil production policy and canceling the proposed Keystone XL pipeline on environmental grounds, Russia decided to invade Ukraine.
The US and Canada quickly declared an embargo on Russian oil, while the European Union – which is more dependent on Russian energy – struggled to devise a coherent policy. With energy prices skyrocketing, Western governments focused on increasing non-Russian supplies, including by recommissioning European coal plants and expanding US oil and natural gas production. Cynics could argue that this is an Augustinian case of “grant me chastity and continence, but not yet.” Clearly, a more radical rethink of energy geopolitics and decarbonization is necessary to confront the Russian threat.
Russia’s new aggressiveness has been enabled by its oil boom. The country’s oil production declined precipitously after the breakup of the Soviet Union in 1991, reaching a nadir of 6.1 million barrels per day in 1998 – five million fewer than a decade earlier. But output subsequently recovered completely, reaching a record 11.7 million barrels per day in 2019.