In Geopolitics This Week
Recent Russian Military Manoeuvres in Ukraine, US and UK Ban Energy Imports from Russia, Saudi Arabia and UAE Differ on Oil Production Increases, and other stories.
Recent Russian Military Manoeuvres in Ukraine
Russian and Ukrainian forces have continued to battle over territory and key strategic sites in Ukraine. This week saw Russia and Ukraine hold talks.Limited advances east of Kyiv and north from Crimea on March 12 but continue to face logistical challenges, mounting casualties, and sustained Ukrainian counterattacks.
Russian forces did not conduct offensive operations northwest of Kyiv in the past 24 hours, with neither power filling to concede ground. Russian forces made limited advances around Chernihiv and toward Kyiv’s eastern outskirts after pausing for several days. Continued Ukrainian counterattacks and successful operations by Ukraine’s Territorial Defense Forces continue to threaten Russia’s long line of communication in northeastern Ukraine. Russian forces captured unspecified eastern outskirts of Mariupol on March 12, and continue to shell the city in a likely effort to force it to capitulate.
Russian forces did not conduct offensive operations northwest of Kyiv for the second day in a row. Russian forces resumed limited attacks toward northeastern Kyiv and renewed efforts to fully encircle Chernihiv. Ongoing Ukrainian counterattacks in northeastern Ukraine are likely forcing Russia to redeploy forces away from offensive operations toward Kyiv to consolidate its long line of communication. Russian forces made limited territorial gains in eastern Mariupol and continued to shell the city. The Ukrainian General Staff reported Russian forces conducted a new advance northeast from Kherson along the western bank of the Dnipro.
Rather than a rapid and decisive capitulation of the government in Kiev and a defeat of Ukraine’s armed forces, Russia is now finding itself engaged in a slow, grinding war against sophisticated weapons systems. Russia has so far failed to achieve a change in government in Kiev, has failed to break the will and ability of Ukraine’s military forces to conduct operations against Russian forces, and has failed to acquire any semblance of information dominance. While this does not mean that Russia will not achieve its objectives, the manner in which Moscow has conducted this war has left the reputations of Russia’s political, economic and military institutions badly bruised.
The loss of surprise has been a failing of Russia’s offensive manoeuvres, in part spoiled by a consistent flow of US intelligence detailing Russian troop movements to all NATO allies (as well as Ukraine) months before the invasion took place. This flow of intelligence also allowed the Ukrainian military to mitigate Russia’s military advantages, which — with the help of military advisors from NATO member states — strategically positioned their armed forces at a distance from Russia’s many armoured battle groups. This has allowed the majority of Ukraine’s military capabilities to withstand the kind of rapid armoured advances Russian military doctrine leans on, and Kiev has shifted the bulk of kinetic engagements between the two sides closer to urban centres where a large population has been prepared for a fierce resistance campaign. Similarly, Russia has failed to disable Ukrainian communications, and this has enabled Kiev to wage an effective campaign of psychological warfare against Russian aims and objectives.
US and UK Ban Energy Imports from Russia
The United States and the United Kingdom have decided to ban all energy imports from Russia. The UK announced a gradual phase-out of imports of Russian oil and gas products by the end of this year, while the US Presidency has issued an executive order banning oil, coal and liquefied natural gas products from Russia. The move is significant as both the UK and the US attempt to cut off the main financial artery of Russia’s economy.
The United States imports roughly 500,000 barrels of Russian crude oil and associated products per day, and, much like the UK, can afford to ban imports from Russia without suffering severe consequences on its own industry and economy. However, the situation surrounding Russian energy supplies is very different in Europe, where the US and the UK have sought to convince allies to join in a coordinated set of energy sanctions. European countries are far more dependent on Russian oil, gas and coal to attempt to isolate Russia's energy-heavy economy unless they wish to threaten their own economic activity. Germany is one concrete example where a loss of Russian energy has been recognized as a credible threat to civil order and stability, preventing German policymakers from joining in Washington’s harsh sanctions regime as German officials have already dismissed the idea of sanctioning Russia’s oil and gas industries.
As European and US companies withdraw their operations from Russia, Chinese businesses may be eager to take advantage of the reduced value of many Russian enterprises. Support by the Chinese government in facilitating major investments in Russia could prove mutually beneficial for both Moscow and Beijing, with Russia’s massive energy industry a likely target for such arrangements in the near future.
The exodus of US and European companies from Russia is certain to leave a vacuum that China is able, and likely willing, to fill, with investments in oil, gas, and metals projects offering particularly lucrative opportunities for state-backed Chinese enterprises. While no concrete deals in these industries have been announced as of yet, a state-led effort to expand into Russia’s markets presents mutual benefits for both China and Russia as China desperately needs raw materials and energy supplies to grow, while Russia is in need of financial support via the selling of materials and energy supplies. This would appear to both Moscow and Beijing as a win-win situation, offering opportunities to bolster their respective national interests, strengthen bilateral ties, and underminine the global dominance of the US dollar by increasing non-dollar transactions.
Saudi Arabia and UAE Differ on Oil Production Increases
As the United States is seeking out alternative sources of oil and oil-related products to replace supplies linked to Russia, officials have turned toward the United Arab Emirates and Saudi Arabia for assistance in increasingly global supply by rising production. The United Arab Emirates has voiced support for increasing domestic oil production while Saudi Arabia remains committed to maintaining planned production levels as agreed with other OPEC+ members.
Ambassador Yousef Al Otaiba announced the UAE’s desire for increased oil production following a call between officials in Washington and Dubai, with the UAE also indicating a willingness to table discussions for increased oil production when OPEC+ meets later this month. The Biden administration has been actively pressuring its allies in the Gulf to increase oil production as a means of lowering the price of oil. However, Russia, Saudi Arabia and other OPEC+ members have declined to increase production. But the UAE is also a member of OPEC, and appears to be changing its position by endorsing an increase in oil production. Otaiba emphasized that the UAE has an interest in maintaining “stability” in global energy markets, to which the UAE has long been a “reliable and responsible” supplier of energy. The price of crude oil dropped following Otaiba’s remarks, and US Secretary of State Antony Blinken immediately praised the statement made by the UAE Ambassador to the US.
Conversely, despite international pressure to shun Russian energy over its invasion of Ukraine, Saudi Arabia has reiterated his country’s commitment to Russia via the OPEC+ agreement. Saudi leadership has emphasized his country’s partnership with Russia in terms of an interest in maintaining “stability and balance” in oil markets. In effect, comments made by Saudi officials following Russia’s escalation in Ukraine underlined the broad-based strategic political and economic shift away from the US sphere of influence and towards that of China and Russia.
The catalyst for this shift in alliances can partly be attributed to the rise of US shale companies becoming a dominant force in global energy markets. The Saudi failure to maintain its once undisputed position in oil markets following the 2014-2016 Oil Price War has led the leadership in Riyadh to question its long-held alliance with the US. The Saudi leadership realized that the unchecked rising production of oil in the hands of the US would mean the gradual decline of Saudi Arabia’s power and its position as a key player in the Middle East. Such a reality would also mean that the US would be less inclined to support Saudi Arabia going forward. Since the 2014-2016 Oil Price War, Saudi interests have come to more closely align with those of Russia, as both states seek to maintain their enviable position as major oil exporters.