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The Next Stage of the Hot Cold War

Oil demand and supply are quite unresponsive to oil prices in the short run, but historically quite responsive over 5-10 years. To counter Russia in 2023 and beyond, the West needs to focus more intently on reducing demand for fossil fuels, particularly oil, and increasing the supply of alternative energy sources.

WASHINGTON, DC – After a year of big surprises, led by Russia’s invasion of Ukraine, the global spike in inflation rates, and the collapse of cryptocurrency ventures, what kind of year will 2023 prove to be? This kind of short-run question is hard to answer, because repercussions of events spread so quickly and unpredictably across our globalized world. But the last 12 months highlighted one major trend that will shape what happens next, in 2023 and beyond: the decline of Russia.

Russian aggression is nothing new. Moscow has been invading other countries since the mid-1990s and has occupied parts of Ukrainian territory since 2014. But the brutality of Russia’s attacks since late February far exceeds what is acceptable to most countries. The most recent phase, destroying civilian energy infrastructure, is widely seen as amounting to a war crime. It is unlikely to change the course of the war, which Russia is losing.

In the bigger picture, Russia has again entered a period of secular decline, during which it will have limited access to Western investment, technology, or consumer goods. Russia’s empires have collapsed before, in 1917-18 and again when the Soviet Union imploded in 1989-91. In both cases, the collapse took a while to get going, and then proved quite complete. Of course, historically Russia has also been able to reassert control, using its own resources during the Civil War of 1917-22 and getting a lot of help from Western companies during the 1990s.