“The only reason Putin is able to march his armies and sail ships threatening Ukraine is because the oil and gas market is so high.” That was the most poignant statement made by Debra Cagan, Distinguished Energy Fellow, Mediterranean Basin, Middle East, and Gulf Initiative from the Transatlantic Leadership Network at the February 3, 2022 “Russia-Ukraine conflict and implications to Turkey” meeting sponsored by the Atlantic Council.
This statement was made by an energy analyst after carefully discussing the dependence between Russia and Germany, Turkey and Turkey which are two of the biggest consumers of Russian natural gases in NATO.
Russian natural gas leverage makes Germany economically fragile. This explains Germany’s reluctance to upset Russia. Something that analyst Can Kasapoğlu, the Director of Security and Defense Studies Program at EDAM, noted was a blunder by the Biden administration to base its Ukraine response policy on German posture when it came to office as opposed to fully consulting a broader spectrum of NATO partners. It left the West in a weakened negotiating position, particularly in the vacuum after the Trump Administration’s departure. Putin had both the courage and financial means to be bold.
Cagan noted that the current international gas shortage is a result of a mix of production cuts due to COVID-19 and hesitancy from producers to invest new capacity. Many customers have made commitments to climate change mitigation to renewables, while Middle Eastern producers are increasingly committed to long-term supply agreements with China. Russians benefit from this expensive spot market in energy. Russian Federation President Vladimir Putin is able to indulge in military adventurism because he has sufficient disposable income.
But this also means that Putin’s house of cards can just as easily collapse. If the price of oil and gas drops, Putin’s ability to continue to threaten Ukraine will be dramatically strained. That’s easier said than done. Cagan also noted that Russian suppliers aren’t ready for competition.
The Iranian gas pipeline that would send gas from that country isn’t ready. The Iranians need hard cash investments to complete building it but the money isn’t forthcoming given the Western community’s continued reluctance to work with the Iranian government. In order to obtain energy for the West, Iran relies on gas swaps from Iran to Turkmenistan through Azerbaijan.
Qatari and Saudi Arabia, on the opposite side of the Gulf are now focusing their efforts to secure long-term agreements with Asian nations like China or Japan. US producers are also hampered by a thick layer of politics, which prevents them from both transporting their supplies and taking them out to the ground. This creates Russian political leverage.
That could change if the Biden administration decided to use the energy market as an asymmetric weapon to undermine Russia’s ability to afford to parade its army around Crimea, Belarus, and Russia skirting the easter edges of Ukraine.
Personally, I advise the US to work with oil-producing states to reduce dependence on Russian supply and bring down spot prices. This will create an economic wedge that signals Putin that with sanctions or no, Putin’s free money for monopoly in Ukraine is gone.
It remains to be seen if the Biden administration is pragmatic enough to shed the bondage of “woke” progressivism and climate change politics, even for a little while, in order to create an effective asymmetric threat to Putin’s financial ability to threaten Ukraine.
The thing is that this might be enough to tip the scales back towards an outcome that gets the Russians to decide on their own that this isn’t the time or the way to look out for their security concerns. It paves the way for constructive diplomacy to counsel Mr. Putin that he would be much better off re-investing the windfall profits of a hot energy spot markets into his own country’s infrastructure. This is the best way to grow from an economy with a GDP of $1.483 trillion US dollars into one that’s much bigger.
Calculus for Deterrence
Cagan spoke out about another important point regarding Ukraine’s calculus. She noted that “Ukraine doesn’t have to win against the Russians. They just have to make it hurt.” The reality that an invasion by Russia will result in a long, drawn-out conflict is a credible deterrent.
Ukraine must convince Russia that it’s going to be another Afghanistan, the way it was for both the USSR and USA, a sinkhole that will eventually need to be walked away from.
This is only possible if Russia can convince the separatists of Donetsk, Luhansk areas in eastern Ukraine that they will not be defeated unless Russia invades. In this regard, Can Kasapoğlu notes that cooperation between Ukraine and Turkey, which has been supplying armed drone technology to create a modern network-centric warfare capability similar to the battlespace management systems used by the United States, Turkey, and other coalition nations in Syria to wage war, provides a growing capability to deal with separatist elements in Ukraine.
Kasapoğlu is quick to point out that Ukraine’s capability is inadequate against the full might of the Russian Federation; but as long as the fighting inside Ukraine is limited to proxy separatists, the Ukrainian government can hold its own.
To make a Russian invasion “hurt,” it will take bolstering Ukraine’s military to the point that it can become a permanent insurgency harassing a Russian presence into surviving inside fortresses and outposts. Or, a Western sponsored Taliban.
According to a report from Ukraine by Hollie Mckay, ordinary Ukrainians are going “2nd Amendment” and preparing to do just that, “Ukrainians start arming themselves for possible Russian attack”. That’s a start but the West must also keep supplying Ukraine with weapons designed to defeat modern tank armies, which the US and NATO have been doing.
If the Russians do invade, it’s unrealistic to think they’ll be repelled. This is the clear implication. This means that the West has to commit to continuing the supply of a proxy war to the Ukrainian insurgency until they leave. This is a way of trading a smaller separatist group that would like to join Russia with a larger one that wishes to expel Russia.
If Russia invades Ukraine, it can run an insurgency in exile from the West, while NATO countries provide diplomatic cover at the United Nations. On this front, it’s the best posture for the US, UK, France, Germany, and Turkey to signal a willingness to support a Ukraine government in exile if Russia invades, with a promise that Ukraine will be invited to join NATO when the Russians eventually leave.
Ukraine is a potential proxy war zone. There is no shortage of weapons technology in the West. Ukraine might be the next proxy war ground to test advanced conventional warfare weapons concepts, considering the pace at which drone warfare technology evolves. That’s a prospect that would certainly “hurt” for Russia. That was the case when Russia’s last visit to Afghanistan, the USSR sent Stinger missiles that turned Mi-24 Hind helicopter gunships in death traps.
Alternatives to Invasion
If Russia does not invade, Ukraine seems destined to become the next no man’s land Fulda Gap of the European landscape. It’ll be stuck between NATO and Russia for some time. In the calculus of global stability, that’s perfectly fine. Standing downs can be useful tools for statecraft.
The key to preventing an invasion is who can negotiate stable and deterrent outcomes. At the moment, it’s probably the United States and the bolder NATO countries that don’t have severe leverage dependencies on Russia, which leaves out the Germans who, despite the sugar coating of the diplomacy, have shown themselves to be not ideal for drawing NATO’s line in the sand.
Analyst Yevgeniya Gaber, Senior Fellow, Centre in Modern Turkish Studies Carleton University, viewed Turkey as a possible diplomatic broker. This is because Turkey is both NATO Member and has an intricate economic and military relationship. Turkey purchased S.400 antiaircraft missiles (from Russia) from Turkey. Turkey was also able to shoot down a Russian airplane that had entered Turkish airspace. Gaber noted that Turkey could be a shuttle diplomacy broker testing how much “give” the US and Russia can tolerate. But Cagan and Kasapoğlu saw Turkey’s predicament as more of a moment when Erdogan will have to stop straddling the line and chose a side.
Regardless, the real question is would either the US or Russia welcome a brokered “crab walk” strategy to the power play negotiations at hand. According to the Atlantic Council panelists, no. I agree. Russia and the USA enjoy too much direct loggerhead bargaining.
The Sound of Inevitability
However, the standoff won’t last forever. The oil market will change to one that isn’t so rich at some point. It’ll happen whether the US uses price manipulation as an asymmetric weapon or not. No matter what Putin does, Eurasia’s future is set. Ukraine, I think, will be a NATO member and take up a spot next to Turkey and Bulgaria. The Ukrainian coast will change from being a Russian lake to one that is part of the European Union.
About Post Author
