The New Year will bring not only new leadership to key energy venues around the world, but it will also bring impactful developments in the run-up, as incumbents act to secure their destinies at all costs.
From Russia to Venezuela and the United States, with a stage-setting surprise already unveiled in Argentina, this is one of the most important election years in decades.
Russia: March 15-17, 2024
Russian President Vladimir Putin is pulling out all the stops for his presidential bid in March next year. To that end, leading Kremlin critic and the country’s most influential opposition figure and anti-corruption campaigner, Alexei Navalny, has been sequestered (at best) in a secret location for the past two weeks. No one knows where the imprisoned opposition leader is now.
Navalny, who has been serving a prison term in the 1K-6 prison outside of Moscow has not appeared at any scheduled court hearings for December, according to The Moscow Times, and his lawyers haven’t seen him since December 5.
In August, Navalny was sentenced to 19 years in prison on “extremism” charges in a brazen attempt to keep him out of politics.
In the meantime, it’s the high season for treason in Russia as Putin seeks to quash any detractors. According to The Moscow Times, a record number of 63 cases of high treason have been sent to the courts this year, with an additional seven cases for “confidential cooperation with a foreign state or organization.” It smacks of Stalin’s days. Related: Russia To Cut Oil Exports From Sea Ports in January
On December 22, Putin seized the country’s biggest car dealership (Rolf) and put it under state management, claiming it was for commercial reasons but the reality is that the owner is Sergei Petrov, a Kremlin critic. Rolf, which is based in Cyprus, has been around since the fall of the Soviet Union. The Kremlin has accused Rolf of illegally moving money abroad at a time when Russia’s wartime economy can’t allow for it. Petrov’s take on this is that Putin is paving the way for his cronies to redistribute assets amongst themselves.
On the war in Ukraine, it remains unclear as to whether Putin has succeeded in conveying to the public that this is a victory in any way, or what it has meant for the Russian economy or Russia’s influence in the former Soviet arena. Russia in 2024 will undoubtedly usher in another victory for Putin, but his cronies and loyalists have been shifting, and that means a redistribution of assets and a largely uninvestable country. His victory will not, of course, shock the market or have much impact on oil and gas prices, which have long ago calculated any Putin premium there is to be had. A defeat for Putin, however, would roil markets because of the massive amount of uncertainty this would bring.
Can anyone challenge Putin at this point? Not really. The only challenger hopeful is former journalist Yekaterina Duntsova, who is being accused of being backed by Yukos Oil boss Mikhail Khodorkovsky (both deny this), who is classified in Russia as a “foreign agent”. He’s a fugitive oligarch running an opposition movement from outside of Russia.
A second candidate appeared in December, 60-year-old Boris Nadezhdin, a former politician and commentator who has accused Putin of undermining the country’s democratic institutions with his authoritarianism. He’s also called Putin’s invasion of Ukraine a “fatal mistake”--a statement that could land him in prison for treason.
71-year-old Putin does not appear to have been weakened significantly by the failed Wagner mutiny earlier this year; Ukraine’s counteroffensive has showed signs of stalling; and while the economy may not be rock solid due to the war effort, the propaganda machine is working at full force to get across a different narrative, and it seems to be working. Most analysts are preparing for a show election that will see Putin–already in power since 1999–remain in power thanks to Constitutional amendments that he made sure went through to allow him to stay in power for more than a decade longer.
For oil, it will mean more of the current status quo of war in Ukraine and Western sanctions and price caps, which will simply become the norm.
Venezuela – 2024 (TBD)
Venezuelan President Nicolas Maduro cut a deal with Washington for a temporary easing of sanctions on Venezuelan oil. The deal was for free and fair elections, and that he would not attempt to thwart the opposition’s participation.
His first move was to issue arrest warrants for a handful of opposition figures, including former National Assembly leader Juan Guaido and staffers of the opposition presidential candidate Maria Corina Machado.
This coincided with the holding of a referendum on the annexation of Essequibo, the oil-rich area of Guyana, which makes up some two-thirds of the country’s territory. While Guyana and Venezuela have held talks since and vowed to refrain from a military confrontation over the matter, Maduro is desperate, and from a domestic standpoint, this is a play designed to circumvent elections by escalating things to a level that would allow him to declare a state of emergency. As noted by Andres Oppenheimer writing for the Miami Herald in late December, to achieve his goals, Maduro could send a stealth force to claim Essequibo without firing a single bullet. By establishing this presence and officially declaring Essequibo under Venezuelan control, Maduro creates an international incident that the West will find necessary to address. Under the continually escalating pressure of an “international incident”, Maduro will find the legitimacy he needs to declare a state of emergency and cancel 2024 elections, or at least postpone them indefinitely.
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A state of emergency would allow him to cancel elections. The West would act slowly because China and Russia would back Venezuela’s claim and the West would seek to avoid any actual confrontation.
This is a potential Pandora’s Box of geopolitical consequences, too, because Maduro is also being used as a puppet for Chinese and Iranian ends.
As historian Gregory Copley noted for Oilprice.com earlier in December, China and Iran have been working with Maduro to escalate the Guyana crisis as a way to force Washington to withdraw forces from the Indo-Pacific military build-up and redirect them. The Russia-Ukraine war has likewise benefitted China as it has caused Western forces to get bogged down in the Euro-Atlantic. Copley sees the prospect of U.S. and UK military support for Guyana as “real”.
By Charles Kennedy for Oilprice.com
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But is in geopolitics that Russia’s and the US elections will have most of the impact.
President Putin is certainly assured of a fifth term. He will have a mandate from the Russian people to complete his job of building Russia into a formidable superpower and prevail in Ukraine on Russia’s terms.
Moreover, he will continue to undermine the United States’ economy, the petrodollar and its influence while also transforming his strategic alliance with China into the most formidable military power facing the US.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert.