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Russia’s Invasion Of Ukraine Highlights America’s Fading Geopolitical Influence

  • While it was no surprise that China abstained when the UN Security Council voted to condemn Russia’s invasion of Ukraine, the abstentions from the UAE and India were more surprising.
  • This vote highlights that Washington’s ability to counter the influence of China and Russia in the Middle East is limited.
  • The fading influence of the U.S. in the Middle East is a result of its withdrawal from the Iran nuclear deal, its withdrawal from Syria, and its failure in Afghanistan.

Last week’s failure of the UAE and India – along with just China – to vote in favor of the UN Security Council’s resolution to condemn Russia's aggression against Ukraine and to demand the immediate, complete, and unconditional withdrawal of Russian forces from the neighboring country earned all three countries the explicit thanks of Russia. It also highlights the broader shift in the once clear-cut global political alliances to the two principal power blocs in the world: the U.S. and its allies on the one hand, and China-Russia and its allies on the other. 

Nowhere has this shift been more evident in recent months than in the cases of the UAE - which on 13 August 2020 became the first country to sign a U.S.-sponsored ‘relationship normalization’ deal with Israel - and of India. Saudi Arabia is on the same level, as is analyzed in-depth in my new book on the global oil markets, and reinforced this with the very recent statement that it is still committed to working alongside Russia in OPEC+. The clear and principal purpose of the U.S. in brokering these relationship normalization deals, and those that followed, was to counter the burgeoning influence of China and Russia in the Middle East. However, not only has the UAE in recent months been keen to distance itself from such a unipolar view of its global political allegiances but also now India – which had been intended by the U.S. as a replacement global bid for China in the oil market – has stepped back from fully committing the role envisaged for it by Washington. 

Shortly after the concept of the relationship normalization deals between Israel and as many countries in the Middle East and North Africa as possible had been originated in the U.S., various high-level sources in Washington let it be known that its new oil and gas market world order would, as far as the Middle East was concerned, involve Gulf states selling oil and gas predominantly to U.S. allies, including India, and that India as well would be the big back-up global bid for the commodities. This meant that in times of crisis, such as is now occurring in Ukraine, energy supplies to Western powers would not be subject to the potentially devastating threats that could proceed from Russia simply cutting off its gas supplies to Europe or, as has more recently happened with widespread sanctions against Russia, leave many U.S. allies in Europe scrabbling around to find alternative energy supplies. It was thought, as also analyzed in-depth in my new book on the global oil markets, that the relationship normalization deals would allow the U.S. and its allies to, in effect, corner large elements of the oil and gas supply in the Middle East. It was also thought by Washington that, by positioning India as the global replacement buyer for oil and gas instead of China, China’s geopolitical position in its own backyard of Asia Pacific would be weakened over time. 

There is every reason to expect this strategy to work, provided that the U.S. begins to ‘encourage’ the countries involved to understand that the new world order (as clearly heralded by the Russian invasion of Ukraine) is a zero-sum game, with one side ultimately winning at the other’s expense, and that all countries need to pick a side and be prepared to be judged by which side they pick. At the time that the U.S. made the decision to substitute China with India in the global oil and gas markets, military units of India and China had clashed on 15 June 2020 in the disputed territory of the Galwan Valley in the Himalayas. As also examined in my new book on the global oil markets, this clash reflected a much greater change in the core relationship between the two countries than the relatively small number of casualties might have implied. It marked a new ‘push back’ strategy from India against China’s policy of seeking to increase its economic and military alliances from Asia through the Middle East and into Southern Europe, in line with its multi-layered multi-generational project, ‘One Belt, One Road’ (OBOR). Until China dramatically upped the tempo of this OBOR-related policy – at around the same time as the U.S. signaled its lack of interest in continuing its own large-scale activities in the Middle East through its withdrawal from the Joint Comprehensive Plan of Action with Iran and its withdrawal from much of Syria – India had stuck to a policy of trying to contain China. With the announcement in August 2020 of the U.S.-brokered Israel-UAE ‘normalization deal’ it appeared that a new corridor of co-operation was being developed from the U.S. (and Israel), through the UAE (and Kuwait, Bahrain, and in part Saudi Arabia) to India, as a regional counterbalance to China’s growing sphere of influence.

Also around the same time, the International Energy Agency (IEA) released a report showing that India will make up the biggest share of energy demand growth at 25 percent over the next two decades, as it overtakes the European Union as the world’s third-biggest energy consumer by 2030. More specifically, India’s energy consumption is expected to nearly double as the nation’s GDP expands to an estimated US$8.6 trillion by 2040 under its current national policy scenario. This is underpinned by a rate of GDP growth that adds the equivalent of another Japan to the world economy by 2040, according to the IEA.

At that time, the U.S. believed that India’s then-willingness to play this role in the global oil and gas markets would allow it to retain influence over the UAE’s oil flows – set to move from around 4 million barrels per day (bpd) to 5 million bpd – given the Emirates’ already close links to India. Also around that time, the chief executive officer of the Abu Dhabi National Oil Company (ADNOC), Sultan al-Jaber, stated that he looked forward to exploring partnerships with even more Indian companies across the energy giant’s hydrocarbon value chain. He added that he wants this to include expanding the commercial scale and scope of the strategic reserves partnership, in line with ADNOC being the only overseas company to hold and store India’s vitally-important strategic petroleum reserves (SPR). In keeping with the developing scope of this relationship, India’s government approved a proposal that allows ADNOC to export oil from the SPR if there is no domestic demand for it, in the first instance from the Mangalore strategic storage facility (the other major SPR pool being at Padur). This decision marked a major shift in the policy of India in the handling of these vital energy reserves, with the country having previously completely banned all oil exports from the SPR storage facilities. 

This commitment to meeting India’s increasing energy demands was reiterated by the UAE last week - as the Brent oil price broke through US$100 per barrel - with its inclusion in the Joint UAE-India Vision Statement, which follows the signing of the India-UAE Comprehensive Economic Partnership Agreement on 18 February 2022. The problem for the U.S. in this – and as has just been echoed as well in India’s unwillingness to ‘sync’ with the U.S. and its allies’ condemnation of the Russian invasion of Ukraine last week – is that Russian President Vladimir Putin used the chaotic domestic political situation in the U.S. following its withdrawal from Afghanistan and then ‘end of combat mission’ in Iraq to sneak in and do a huge, wide-ranging deal with India, effectively scuppering Washington’s own vision for India and the UAE. 

As exclusively highlighted by OilPrice.com, mid-December 2021 saw Russia’s state-owned oil giant, Rosneft, sign a deal with Indian Oil to supply it with almost 15 million barrels of crude by the end of this year. The deal takes on even more significance as it was just one part of 28 investment deals between Russia and India signed during the very recent visit of Putin himself to Indian Prime Minister, Narendra Modi. These covered a broad range of subjects, including not just oil, gas, petrochemicals, steel, and shipbuilding, but also military matters. Specifically, said Modi: “We have set a target of US$30 billion in trade and US$50 billion in investment by 2025.” 

A joint statement from Russia and India said: “[We have] reiterated their intention to strengthen defense cooperation, including in the joint development of production of military equipment.” Specifically, according to further official statements from one or both sides, India will produce at least 600,000 Kalashnikov assault rifles – the weapon of choice for terrorists and militias across the Middle East and elsewhere – and, even more disturbing for the U.S., India’s Foreign Secretary, Harsh Vardhan Shringla, said that a 2018 contract for Russia’s S-400 air defense missile systems is now being implemented


By Simon Watkins for Oilprice.com

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  • DoRight Deikins on March 01 2022 said:
    India has had mutual interests with Russia for years. It is not anything new. Perhaps the US thought they could supplant those interests, but they are mistaken. India needs leverage against China. In recent history, at least relatively recent, India well understands China, from the conquest of Tibet (with all the refugees fleeing to India where they still make up a vocal percentage of the population), to Chinese assistance of Pakistan in its border skirmishes with India. None of this is new. They have always competed. There is a reason that South East Asia is known as Indochina.

    Russia is a much better counterpoise to China for India than the US. The US is on the other side of a very big pond, China is right next door. Russia is a sufficiently distant, but in terms of Asia, not far; and it is in the game. This is the same reason North Vietnam sought Russia's assistance rather than China's in the 60s against the US. The Middle Kingdom doesn't like to leave once it has been asked for help. It is a very STICKY help. Also the US and the West have a 15 minute time frame; the East has a multi-generational time frame. The Mao dynasty has barely gotten started.

    That is not to say that India is anti-US. It has deep ties to the West. It is probably one of the most, if not the most, democratic nations in the world. In general the people are some of the best read people in the world, and I'm not referring to the bling that passes for reading on the internet. But to think that it is the West is to misread India. (One of my favorite parts of India are the many statues of the British conquerors. If you ever spend time there, you will understand!)
  • Mamdouh Salameh on March 02 2022 said:
    Russia’s invasion of Ukraine indeed highlights America’s fading global geopolitical influence exactly as the US invasion of Iraq in 2003 highlighted Russia’s fading geopolitical influence in the aftermath of collapse of the former Soviet Union. It also underlines a major shift in the political order of the world from a unipolar to a multipolar order ushered by the rising influence of the strategic Chinese-Russian alliance.

    UAE’s and India’s abstaining from voting in favour of a UN Security Council resolution condemning Russia's aggression against Ukraine and demanding immediate, complete, and unconditional withdrawal of Russian forces from Ukraine is an indication of the growing influence of the China-Russia-Iran alliance at the expense of the US-UAE-India-Israel axis in the Gulf region.

    This is also evident in Saudi Energy Minister Prince Abdulaziz saying that OPEC+ has no intention currently to change its current production policies given the accelerating rise in oil prices. It will sit tight and wait for the Ukraine crisis to settles down eventually.

    Another indication is that Iran will never accept any nuclear deal unless it is on its own terms meaning a total lifting of US sanctions against it first with no new limitations on its nuclear and ballistic missile development programmes. Iranian negotiators know full well that the United States is in a hurry to reach a new nuclear deal so as to focus its energies on China and the evolving Ukraine crisis. Iranian negotiators are going to extract very major concessions from the United States before they agree a deal.

    The Ukraine crisis has the potential of starting WW III if the United States and the European Union (EU) decide to support Ukraine militarily and openly against Russia.

    They could have prevented the Russian attack on Ukraine if they have showed some statesmanship and addressed Russian security concerns and prevailed on Ukraine to forget about joining NATO thus basing nuclear missiles right on the border of Russia.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Kay Uwe Boehm on March 02 2022 said:
    The Tel Aviv daily Haaretz noted that Ukraine is now the only country other than Israel to have both a Jewish president and prime minister.

    After his election victory, he received numerous congratulations from abroad: Emmanuel Macron, Donald Trump, Jens Stoltenberg, Justin Trudeau, Jean-Claude Juncker, Donald Tusk and Linas Linkevi?ius congratulated him on his success. German Chancellor Angela Merkel also congratulated and invited Zelenskyj to Berlin.

    In October 2021, however, publications on the Pandora Papers revealed that Zelenskyj was said to have operated a letterbox company in a tax haven, a practice for which he had criticized his predecessor before taking office.

    In 2020, Zelenskyi had Rosh Hashanah, the Jewish New Year, declared a national holiday.

    Role in President Trump's Ukraine affair
    As early as May 2019, Zelenskyj and his advisers discussed how the pressure from US President Donald Trump and his adviser Rudolph Giuliani should be dealt with. On July 25, 2019, Trump is said to have asked Zelenskyy in a telephone call to initiate investigations into Joe Biden, Trump's possible opponent in the US presidential election 2020, in exchange for much-needed military aid. In his previous position as US Vice President, Biden is said to have arranged for the dismissal of Ukraine's Attorney General Viktor Shokin to protect his son Hunter, who has been on the board of directors of the Ukrainian natural gas company Burisma Holdings since 2014, from corruption investigations. Zelenskyi told a reporter from the Rossiya 24 TV channel that nobody could pressure him because he was the president of an independent country. However, at the time of the call, the US government was holding back nearly $400 million in military aid to Ukraine that had already been approved by Congress. The news of the phone call triggered the Ukraine affair in August 2020. The American Democratic Party took the call as an opportunity to prepare impeachment proceedings against Trump.

    In response to a briefing by the United States (or the US CIA) to the heads of government of the NATO countries that Russia might begin an attack on Ukraine on February 16, 2022, Zelenskyi declared this day a national holiday by decree.

    Selenskyj was born into a Russian-speaking Jewish family in the industrial city of Krywyj Rih (Russian: Kriwoi Rog) in the south-east of what was then Soviet Ukraine (Dnepropetrovsk Oblast). His family lost three members in the Holocaust.

    On New Year's Eve 2018, Zelenskyi announced his candidacy for the election on TV channel 1+1. He was said to have a certain dependency on the Ukrainian oligarch Ihor Kolomojskyj, since he works for the television station 1+1 and has a contract until 2022 in which, via the Central European Media Enterprises, WarnerMedia with 49.9%, Kolomojskyj with 50, 1% stake.

    As a presidential candidate, Zelenskyi received massive support from Kolomoiskyi. Radio Free Europe revealed that Zelenskyy flew at least 14 times in 2017/2018, first to Kolomoyskyy's former place of residence in exile in Geneva and then to Tel-Aviv - the last times in autumn 2018 after the decision to run for the presidency. Kolomoiskyj's longtime lawyer Andriy Bohdan played a prominent role in the election campaign staff and has already been sent by him for talks with the head of Ukraine's National Anti-Corruption Bureau (NABU). His bodyguards, who previously protected Kolomoiskyi when he was still in Ukraine, also ensured Zelenskyi's safety and were paid by the oligarch. Kolomojskyj announced his return to Ukraine should Zelenskyj win. In an interview, when asked by TV journalist Dmitry Gordon whether Ukraine would be ruled by Kolomoiskyi if Zelenskyi won the presidential election, Zelenskyy replied that he was only a pawn in check that he had placed.

    Ihor Kolomoiskyi
    Ukrainian entrepreneur and patron

    Ihor Valeriyovych Kolomojskyj (born February 13, 1963 in Dnipropetrovsk, Ukrainian SSR) is a Ukrainian oligarch who was the main shareholder of the state-owned PrivatBank until the end of 2016 and from March 2014 to March 2015 governor of Dnipropetrovsk Oblast.

    He has been one of the richest Ukrainians since 2006. His estimated net worth was $3 billion to $6.5 billion in 2011 and dropped to around $1.2 billion by 2019. In addition to Ukrainian citizenship, Kolomojskyj has Israeli and Cypriot citizenship, lived from 2000 to 2014 mainly in Switzerland and now in Tel Aviv, Israel.

    In his post as governor, he temporarily took over part of the salary payments to public servants and the supply of the troops in Dnipropetrovsk from his private assets. As part of the fighting during the 2014 crisis in Ukraine, Kolomoiskyi said he was paying a $10,000 bounty for every pro-Russian separatist arrested. In mid-April, Kolomojskyj announced the formation of the Dnipro Battalion, a voluntary combat unit financed largely by himself.

    Conflict with President Poroshenko
    After the Ukrainian parliament pa
  • Lee James on March 02 2022 said:
    Yeah, the U.S. has a ways to go to restore world position. But we will get there. It helps to return to a more democratic administration leading our country. Both the Trump administration and the buddy of Trump, Putin, think that they alone can successfully lead.

    We look weak in the aftermath of the Trump administration. Our allies could not have confidence in us. Now they can, but they are looking for evidence of a shift. At the same time, we will be more careful about foreign entanglements that are not in the best interest of anyone.

    Right now, Ukraine is the shining example. Maybe the U.S. will once again be a shining example to the world.

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