Geopolitics in turmoil extending to oil, energy deals, CERAWeek panelists say
The world and energy market are at a point in history, as important as the end of both world wars, and that was true before the Russian invasion of Ukraine, said Atlantic Council President and CEO Frederick Kempe during a CERAWeek by S&P Global session aptly named “Geopolitics: World in turmoil.”
The invasion brings up the question of whether the U.S. can get its act together to shape the future with democratic allies, and how the West can regroup for a new era, Kempe said during Monday afternoon’s panel discussion.
Kempe and Angela Stent, director of Center for Eurasian, Russian and East European Studies at Georgetown University, agreed that there are several ways the invasion could end, and most of them result in ongoing or more conflict. But what we say won’t happen today is not necessarily reflective of what could happen next week, said Meghan O’Sullivan, director of the Geopolitics of Energy Project: Harvard University’s Kennedy School.
Potential Iranian deal. The panel addressed the Iran nuclear deal, which O’Sullivan said Iran and the United States are both very invested in at this point. Two things could happen in the coming days or weeks: Russia could somehow be convinced to pull back on its demand that all its trade with Iran be protected from sanctions in the future, or there could be a substitute for Russia in the deal, she said. “The timeline that everyone is talking about is a really short timeline,” O’Sullivan said. “Something will happen, but obviously it didn’t happen yesterday, when a lot of us were expecting it.”
Sanctions status. There are things happening now that have never happened before, like sanctioning cats, said Yukon Huang, former World Bank country director for China, referring to the International Feline Federation’s ban on Russian-owned or bred cats in contests and registries. There has been “enormous overcompliance” with sanctions and companies pulling out of Russia, O’Sullivan said, adding that they’re nervous that something that is legal today will not be legal tomorrow.
China’s role. The following day, President Joe Biden announced a ban on imports of Russian fossil fuels including oil. The extent of sanctions will be worrying to China, which wants to remain on good terms with Russia and the United States, but also with national sovereignty, Huang said. When asked whether China will see Russia’s invasion of Ukraine as a precursor to invade Taiwan, O’Sullivan said there is not any real sense that this would be a moment to do that. The situation could influence China to think that Taiwan might fight back more than expected, like Ukraine, and it could influence Taiwanese thinking of the role of insurgency in holding off a much larger aggressor, she said.
One major question that remains is who is going to shape the future, Kempe said. “This is a much more decisive moment in human history that most of us actually realize,” he said. One thing there is no question about is that Russia under Putin is a pariah state, said O’Sullivan, and there will likely not be a normalization of Russia’s relationship with the West under his leadership.