British Prime Minister Boris Johnson has embarked on a diplomatic tour of the Middle East in a bid to shore up the UK’s oil supply and protect it from any economic shocks coming out of the war in Ukraine. On Johnson’s itinerary are planned visits to the UAE and Saudi Arabia, both being oil-producing countries with the latter having an extreme level of influence on the world stage simply by its state-controlled oil business. What puts Johnson between a rock and a hard place is that the Middle East is infamous for its pathetic record on human rights, and so British MPs and activists alike are mounting pressure on Johnson to make human rights a key pillar of any discussions.
Only on Saturday did Saudi Arabia execute 81 men sending shockwaves across the Western world in what dwarfed the number of executions from both 2021 and 2020. The UAE has its fair share of criticism with Amnesty International reporting as recent as 2020 that violations such as arbitrary detention, restricting freedom of expression, restricting women’s rights and capital punishment give it a highly questionable human rights record. In contrast, both Saudi Arabia and the UAE claim to promote all aspects of human rights laws and conventions through their government websites.
The decision to tour the Middle East during the worst conflict Europe has seen since WWII comes amid Western sanctions banning imports of Russian oil, sending prices skyrocketing and world leaders awake at night on how to prevent an energy crisis within their borders. Should Johnson be unsuccessful in lobbying for Arab oil he, and other leaders, will likely find it very hard in persuading countries in the oil cartel, OPEC to alleviate the market pressures stemming from the Russian invasion.
From a geopolitical perspective since oil is what the West seeks it gives OPEC leaders a competitive advantage in negotiating their political demands in return for secure and stable access to their oil. Simply speaking, in return for oil, Arab leaders will demand an end to their pariah status on the human rights stage. This trade-off is especially apparent for the US, with whom Arab states have been increasingly displeased especially after the murder of former Washington Post columnist and Saudi dissident Jamal Khashoggi.
If all this sounds very confusing and messy that’s because it is. There might still be a pandemic and there is most definitely a war going on in Europe, but that does nothing to sway world leaders from weaponising the vulnerabilities in front of them to fulfil their vested interests.
Russia Generated $97B in Profit From Oil Imports
The Centre For Research on Energy and Clean Air (CREA) released a report detailing that Russia made $97 billion in profit from fuel exports between February 24th and June 3rd 2022 despite the country’s invasion into Ukraine back in February. 61% or approximately $50 billion of these imports and ultimate profit was from the European Union, who has recently pledged to ban oil imports via the sea by 2022. The United States has banned Russian oil completely, while the United Kingdom stated its hope to stop relying on it by the end of this year.
Other significant importers included China, Germany, Italy, Netherlands, Poland, France, and India. The report states these profits are ultimately being used to fund the war in Ukraine, and despite the decline of revenues since March, still remain “record high.” These increased imports from Russia are also due to countries taking advantage of Russia’s discounted fuel prices, including the Middle East, France, India, and Belgium.
Ultimately, the most “significant shares” are due to customers within the United States and Europe. CREA stated that to curb these sales, more sanctions should be set upon the tankers which deliver Russian crude oil. These profits, the report states, are a “key enabler of Russia’s military buildup and brutal aggression against Ukraine.”
The EU projects that their ban will decrease $36 billion in yearly revenue. However, most of the tankers being supplied to ship the oil are from companies within the EU, which slightly negates the ban. Oil that is being shipped to India for refinement from Russia has also been traced to European companies. These impacts demonstrate the need and Europe’s ongoing ambition to transition to clean and efficient energy, effectively halting funding of the Ukrainian war and creating sustainable living for the future.
Oil Trade From Russia, Despite EU Sanctions
Despite imposed sanctions against Russia and the European Union urging countries not to continue business which funds Moscow’s ongoing invasion in Ukraine, not all have cut ties with the country. Amongst those includes Serbia, which recently announced a three-year natural gas supply deal with Russia. After discussing this plan via a telephone call with his Russian counterpart, Serbian President Aleksander Vucic stated the deal was “extremely favorable” to Serbia, with the country expecting a visit and sign-off from the Russian Foreign Ministry in June for the deal to go into action.
“What I can tell you is that we have agreed on the main elements that are very favorable for Serbia…We agreed to sign a three-year contract, which is the first element of the contract that suits the Serbian side very well.” Vucic stated. He also mentioned that he told Putin his wish for “peace” to “be established as soon as possible.”
Serbia relies on Russia for nearly all of its gas. Although whether or not the country will be able to maintain these ties with Russia remains uncertain, as the European Union recently announced plans to block Russian oil imports over member countries by the end of the year in order to curb profits made by the country which heavily funds the continual military actions. The ban only encompases oil arriving by sea, but Poland and Germany have pledged to stop pipeline oil, blocking 90% of Russian oil.
Serbia isn’t the only country still conducting trade with Russia, Sri Lanka recently procured a deal to purchase 90,000-tonnes or $72.6 million worth of Russian oil in order to kickstart operations within their own oil refinery. The ongoing economic crisis within the country forced the refinery to shut down three months ago, as Sri Lanka faces disastrous fuel and other essential goods shortages. They will continue to discuss direct imports of crude, coal, diesel, and petrol with Moscow.
Decisions from both Serbia and Sri Lanka could result in harsh condemnation from the European Union. While the imports aid the countries by providing an essential good, they ultimately fund the Russian vendetta within Ukraine.
US administration official headed to India to discuss it’s import of Russian oil
Assistant secretary for Terrorist Financing and Financial Crimes, Elizabeth Rosenberg is meeting with Indian officials on Thursday May 26th to discuss India’s import of Russian oil.
She will be visiting Delhi and Mumbai a Treasury spokesperson says to keep India’s purchases of Russian oil from rising. Rosenberg will be meeting with Indian officials as well as private industry.
While there isn’t any law in place that keeps countries from buying Russian oil, the US still wants to enforce a restriction to the purchase of Russian oil.
A senior U.S. official said to Reuters on March 31 “A significant increase in Russian oil imports by India could expose New Delhi to a “great risk” as the United States prepares to step up enforcement of sanctions against Moscow for its invasion of Ukraine”
The Biden administration is putting in a lot of effort to reach out to allies and partners to ensre that the sanctions are being implemented accordingly.
“It’s important to talk to the parts of the world that are strong US partners on a whole host of other issues, and make sure we’re in close contact about our sanctions regime and working together to crack down on any evasion opportunities or evasion activities,” the spokesperson of the Treasury said.
Russians Oil export boosted since March due to India importing its oil. Russia jumped to 3rd place as an oil provider for India.
The sanctions that had been put in place to oppose the invasion of Russia into Ukraine have had detrimental effects on the global economy. In an age where we are interconnected and the world economy is deeply dependent on each other, these sanctions have led to massive shortages in several industries as well as increase living cost.
The whole word is feeling the effects of this cold war that is taking place and it should serve as a reminder that there are no sides to be taken. As a global community instead of shunning out a party and expecting that cutting one country off will bring it to its knees, perhaps we should think of problem solving in a way that can satisfy both parties.
With the modern nuclear weapons there is an ongoing threat for our civilization. This war won’t be a win for any of the parties if it comes to the use of this weapon, so instead of boycotting Russian oil and enforcing it on other countries who are dependent on cheap oil to sustain their countries like it is for India or Hungary, we should look into finding peaceful negotiations.
OPINION: US Offers to ‘Control’ Libyan Oil – Is this Assistance or Opportunism?
Recently, the United States Ambassador to Libya has announced a proposal from the US to help control Libyan oil revenue. Libya, a Northern African country, has the ninth-largest oil reserve in the world and ranks 30th overall for most oil produced in a year.
This proposal comes after rival factions in the country, which is currently in political turmoil as two prime ministers grapple for power, have been arguing over the distribution of funds and control over the oil production. The proposals are planned to be kept in place until the conflict subsides.
The main concern was that the oil revenue may be used by the factions for political purposes instead of providing to Libyans with subsidized goods, medicine and salaries. Especially now with the sanctions on Russian oil exports, keeping the production of oil in Libya at its regular rate of 1.3 million barrels is integral to global markets and keeping prices under control.
It has not yet been made clear how exactly the proposals will aim to function, but the United States claims that they would ensure that warring factions do not impact the production of oil.
Leaders in Libya, however, have responded with disagreement to the proposal raised, saying that the US was meddling with their affairs.
The Oil Minister for Libya, Mohammed Aoun voiced his rejection for the proposals of the United States’ intervention by saying, “The foreign proposals are unacceptable interventions that violate the dignity and sovereignty of Libya.”
But this is not the first time the United States has interfered with oil-related matters in other countries.
For a while, oil in Iran became a nationalized source, meaning that control was transferred to the state. But following the placement of Mohammed Reza Pahlavi as the Shah of Iran, the US began to work with oil majors in the country. By 1954, Pahlavi signed an agreement to have most of Iran’s oil production be overseen by US-based oil companies. This was with the hope that production in oil could be raised for the country, so as to increase exports and decrease the price of oil worldwide.
Since US oil majors and, in some cases, independent producers in the United States had taken hold of the oil production in Iran, that meant that there was less revenue for the Iranians themselves.
Similar to Iran, Iraq had a history of a nationalized oil industry that was run entirely by the state. But following the war on Iraq, most of the oil in the country is now privatized and belongs to foreign-owned investment and production companies. In fact, in the years following 2003, many notable figures who were a part of the war admitted that oil, of course, had something to do with the invasion. Mainly, increasing production and exports of oil in Iraq would benefit the global economy.
After removing Saddam Hussein from power, the White House focused on proposing that the new Iraqi government pass legislation related to oil that would allow for a more privatized system. Through this, independent firms gained the ability to sign on to contracts which would allow them to largely control the production of oil in the country.
The contracts got rid of any such requirement that would force Iraqi oil to stay in the country, force companies to invest the revenue into Iraqi communities or hire local workers. As a result, the oil and gas sector in Iraq accounts for less than 2% of the company’s employment, losing a lot of revenue and goods in the process.
Essentially, like Iranians, Iraqi people lost many of the benefits the country was set to gain through their oil reserves, instead giving it up to oil firms and international investors through US policy.
The fear for Libya is the same, that through the not-yet-confirmed proposals, international investors and firms would gain more control over production and exports, leaving Libyans without any goods from their national exports.
Although the United States of America perceives itself to be a country that mediates oil-related situations in other nations for the welfare of the world, more often than not, it has stranded oil-rich countries in turmoil in a haste to be responsible for more of the global oil market.
As a result, many locals lose the benefit of their national resources, having to give them up for a nation that claims to want the best — but only ever helps itself.
I am a student from Ontario, Canada, and an aspiring journalist. I enjoy reading, writing and learning about the world around us - the issues with it and how we can make it a better place.
Climate activists block oil depot for fourth day in a row – but to what end?
Demonstrators of climate change block Esso West London oil terminal located near Heathrow Airport. The activists have been blocking the oil terminals around the country for the past three days straight and so far there have been more than 200 arrests.
Extinction Rebellion is the main activist group behind these protests and they are preventing the oil trucks from making deliveries. On the fourth day, around 30 people blockaded the oil terminal with bamboo structures to urge the government to ‘stop all new fossil fuel investments immediately’. These protests started on Friday and have targeted various oil terminals throughout the country.
“We’re here to say that climate action cannot wait. Right now, governments are choosing to exploit the crisis in Ukraine to hand out oil licenses and continue the fossil fuel economy that’s destroying us,” says Andre Smith, a protestor.
Another statement by the group said “Extinction Rebellion is calling on everyone watching the current protests to join them at Hyde Park on (Sunday) at 10 am to finally bring an end to fossil fuels. We will return to the streets day after day until our immediate demand – for the UK government to immediately end all new fossil fuel investments – is met.”
Along with Extinction Rebellion, another climate activist campaign group has also joined the fight since Friday, by the name Just Stop Oil which was founded by the same group. These rallies will keep ongoing according to them until the government agrees to a moratorium on all new fossil fuel projects.
On Friday the activists blocked 10 refineries around the country, on Saturday they blocked seven terminals, and now on Sunday, they have blocked at least five refineries. There are planned protests that will continue on Monday as well.
Along with their banners, the protestors have dug tunnels leading to the Inter Terminals and Navigator oil terminals in Essex. This stopped the trucker from entering and exiting the site during the weekend; however, on Monday the police finally escorted the truckers. Some local newspapers have claimed that this has caused fuel from running out in petrol stations, however, it has not been confirmed yet.
“None of our stations ran out of fuel at the weekend, we just had to divert some from terminals further north,” said a source at a top-five fuel retailer.
However, they also added, “That’s not to say (the protests) will not have an impact if they go on.”
Needless to say, these protests can negatively affect the already fuel shortage that the country is going through if they continue. Climate change is a huge issue and there should be more action to help the environment, however, these protests and inflation in oil prices will affect the poorest people while leaving the upper class unaffected.
Moreover, an article by The Atlantic states how the effect of these movements is often insignificant as after the protests “government responses usually amount to little more than rhetorical appeasement, and certainly no major political reforms.”
And another article by The New York Times also makes an important point, “before the Internet, the tedious work of organizing that was required to circumvent censorship or to organize a protest also helped build infrastructure for decision making and strategies for sustaining momentum. Now movements can rush past that step, often to their own detriment.”
Basically, there are no long-term effects of protests as they are not planned to make a long-term impact.
US and EU Partner to Reduce European Dependence on Russian Fossil Fuel
During a joint news conference in Brussels on Friday, the US President Joe Biden and European Commission President Ursula von der Leyen announced that the US and EU have made a deal to increase supply of liquefied natural gas (LNG) from the US to the EU. This is to reduce the reliance of Europe on Russian Energy.
President Biden arrived in Europe this week to take part in several meetings. He said in his statement “Putin has used Russia’s energy resources … to manipulate its neighbours, he’s used the profits to drive his war machine … Today, we’ve agreed on a joint game plan toward that goal, while accelerating our progress toward a secure clean energy future,”.
Explaining the purpose of the deal he said. “This initiative focuses on two core issues. One, helping Europe reduces dependency on Russian gas as quickly as possible Secondly, reducing Europe’s demand for gas overall.”
Biden said the US, working with its partners will ensure 15 billion cubic metres additional to the current supply of LNG to the EU in 2022.
Acknowledging the logistical challenges with supply, Baiden said “It’s going to take some time to adjust gas supply change in structure, as built for the last decade. So we’re going to have to make sure that families in Europe can get through this winter and the next, while we’re building an infrastructure for a diversified, resilient, and clean energy future. At the same time, this crisis also presents an opportunity.”.
According to a White House statement, the deal is to “ensure energy security for Ukraine and the EU in preparation for next winter and the following one while supporting the EU’s goal to end its dependence on Russian fossil fuels”.
White House said that as per deal, the European Commission will ensure the demand of at least 50 billion cubic metres of US LNG per year from the member states.
Von der Leyen said at the news conference “In a world faced with disorder, our transatlantic unity upholds fundamental values and rules that our citizens believe in,”.
“We want as Europeans to diversify away from Russia towards suppliers that we trust, that are friends and that are reliable,” she added. “Therefore the US commitment to provide the European Union with additional at least 15 billion cubic metres of LNG this year is a big step in this direction because this will replace the LNG supply we currently receive from Russia.”
Emily McClain, gas markets analyst at Rystad said, “The US is in a unique position because it has flexible LNG that can be rerouted to Europe or to Asia, depending on who’s willing to pay that price,”.
Issue is that the continent’s import terminals, located in its coastal areas, have fewer pipeline connections. Therefore, it will be difficult to receive the more gas shipped from the US. So much so that even if all Europe’s facilities were operating at capacity, only about two-thirds of what Russia delivers through pipelines can be delivered.
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