Given the evolving situation in Ukraine, the United States has decided to to forbid the import of Russian oil and gas. In the same vein, the UK has also expressed its desire to phase out Russian energy products by the end of this year.
While sanctions on several economic sectors have been imposed on Moscow to limit its actions in Ukraine, recent bans on its energy industry have the potential to heighten the level of insecurity and discord in the international system.
The first point to highlight is that Russia is the second largest producer of natural gas and a major producer of crude oil. Given the role of geography, some countries will inevitably be much more dependent on Russian energy resources than others. This general asymmetry of consumption shows how crucial the role of resource allocation is.
At a time when countries around the world are trying to bounce back from a plethora of economic challenges posed by the Covid-19 pandemic, on top of already high inflation rates and oil prices due to the ongoing crisis in Ukraine, stricter measures on energy resources will create great stress and panic among people around the world.
Furthermore, such a measure can serve as a platform for domestic unrest, which can create dangers for national governments.
Interestingly, in a Wall Street Journal poll, around 79% of respondents supported US President Joe Biden’s ban on Russian oil. In fact, even the opposition also seems to support the government’s position.
This, however, is not without risks. While the United States can be considered energy independent, it still struggles to control its production. As a result, while Russian oil accounts for less than 10% of total US oil consumption, it will be quite difficult to ramp up new oil production within months amid the already exacerbated problem of inflation and high fuel prices.
Moreover, Washington’s inability to convince key Middle Eastern countries to voluntarily board adds another layer of complexity.
Moreover, while the Biden administration has succeeded in securing the Russian threat and shifting Americans’ attention from socio-economic to political issues, the opposition will be watching closely for the decision’s potential negative impact on the well-being of the people. This can eventually serve as critical political leverage against the government.
Moreover, the plan importing oil from Venezuela or Iran would significantly undermine the legitimacy of the United States as the primary promoter of liberal democratic values. This will inevitably result in an inconsistent foreign policy.
This decision by the United States to ban Russian energy resources will also have an impact on the cohesion and functioning of its network of alliances. Europe depends on Russia for 40% of its natural gas supply and a quarter of its crude oil imports. While the UK has announced its gradual exit from importing Russian energy resources, other European countries may not be able to do so.
Indeed, Germany has underline how this will be impractical for the country, due to the possibility of experiencing major energy insecurity. Likewise, other key members of the US alliance in Europe will be reluctant to impose such sanctions, which could create domestic instability and challenge the political power of national governments.
A similar scenario occurred when the United States sanctioned Iran’s energy industry, which forced its major strategic partners such as Japan and India to stop imports. This has created challenges for their development and national interests, given the difficulties of finding an immediate and practical alternative.
With the economically crippling effects of the pandemic, national governments will be extremely cautious when taking actions that could jeopardize their development and public support. This reluctance can deepen fault lines within the alliance network and create more barriers to collective action in the future.
The most important step to take at this stage is to create an environment conducive to dialogue and negotiations between the parties involved in the ongoing crisis. Actions that could further aggravate the situation not only in Ukraine but across the world may not be the most rational measure given the thousands of lives already lost and the millions seeking refuge.