For a long time, I was sitting silent and not touching my laptop, But I was sure my upcoming post surely would be about the war Russia started against Ukraine.
We are living in an era where it’s impossible to say that anything happening in somewhere outside India is not affecting someone sitting in Africa. IMPOSSIBLE. Someone gets affected by a coronavirus and starts a pandemic. Someone miscalculates the effects of giving a head post in Germany to someone fiercely telling the public that I can solve everything. We are all connected. So I am trying to check the implications.
Though I am Indian, I do not support what the government thinks about Russia. I do not deny that Russia helped India in 1977, but it was Leonid Brezhnev then. Now it’s Vladimir Putin.
Why did the war start?
I know many of you checked many internet sources, so this section is one worthless part. You can ignore this, but I found some interesting references. If I fit in combination, I found some interesting pictures.
Vladimir Putin is the person who thinks of himself as part of the giant clan of the ideology of peter the great. He was born in Saint Petersburg may be one reason for it. But as per that, Ukraine. But that is not all. Ukraine was the last country that left USSR. Estonia, Belarus, Latvia, Lithuania, Moldova, Armenia, Azerbaijan, Turkmenistan, and Georgia exited, but Ukrain was there. The reason for that was close to what Mikhail Gorbachev was planning for Russia or the USSR. He was planning to make it the Union of soviet sovereign republics, KEEPING USSR intact. But Then there was a coup, and Boris Yeltsin ended up the winner.
Putin may be thinking this one reason; Possibility increased when people voted on whether to leave the USSR or not, and Crimea was close to half. But Crimea was more connected with the Kherson region than Russia for its water. That’s why after 2014, Ukraine’s government stopped the water supply to Crimea.
Sanctions: are they useful?
Different people will give you other answers. My view?
YES and NO.
Sanctions are one double edge sword. If 100 people decided to make sanctions on anyone, and just one person decided to go against it, then the effectiveness of the sanctions will be less. But by punishing Russia, European economies are punishing themselves. At the same time, trade partners are keeping ties with Russia.
That is not my core subject.
My subject is effects on the world.
Russia is one big player in OPEC+. John McCain once said Russia is a gas station acting as the country.
The reason is simple.
Russia holds ample natural reserves of oil and gas and some metals. Before the war, Russia was the largest supplier of gas to Europe. But now, many countries stopped taking it or reducing quantity. Germany reduced it to half, and Lithuania made it to zero. The US decided to depend entirely on its own. Also, the US agreed to increase export to Europe. All of a sudden world is understanding the secondary impact of any transaction. Ethics is becoming much more critical. Ideology is more important all of a sudden.
Ukrainian researchers have speculated that the country’s eastern region holds close to 500,000 tons of lithium oxide, a source of lithium, which is critical to the production of the batteries that power electric vehicles. That preliminary assessment, if it holds, would make Ukraine’s lithium reserves one of the largest in the world. That’s not all. Oil is also present in the area known as Donbas, a core issue in this war. Crimea, which was annexed by the so-called referendum, also holds reserves. So From that point of view, this is a war between new and old energy. 2012, oil discoveries happened near Crimea.
30% of the entire Russian economy depends on gas, Large part of the Russian government’s income depends on gas and OIL. This is again important as Volgograd, one big city important for oil trade in Russia, is close to Ukraine. If you are Putin, you don’t want them to join nato, so it will be easy for them to attack the Volga river. That nearly happened in the second world war. It is the most straightforward oil logistics in Russia when Russia is the second-largest oil producer, even ahead of Saudi Arabia before the war. Even if their economy was equal to Spain’s before the war, which faced many sanctions, it was not good when you have companies like Petrobras, Rosneft, and oil reserves in Siberia giving you 50% revenue generation for government income. What else you can think.
35% of European energy needs were fulfilled by Russian gas before the war. Germany, the world’s 4th largest economy, fulfilled their 50% gas and 33% need for oil by Russia. For which they built Nordstream 2, which cost $ 11 billion. France imports 26% of its gas, and Italy imports 46% of gas from Russia. Bosnia and North Macedonia imported 100% of their gas from Russia. Bulgaria imported 82%. Latvia 93%, Austria 64, Slovakia 70% imports were from Russia. Now Qatar or USA may be selling them, but even that is a big issue as Russia holds control o many of their routes to imports. Another factor is building pipeline need time and money. So stopping the current system and making another one may slow down as many businesses will shut down. Another significant issue is to set up an economy on gas. LNG terminals are needed; Germany, which was taking important gas, has zero such terminals. Other European economies have very little, which needs to replace Russia with Australia, Qatar, and the USA.
Not buying From Russia and others will create a new situation; Russian gas is cheap, whereas USA and Qatar are selling at a high cost. We are already talking about numbered days of BRENT oil; now, this one will make WTI crude domination,
This may also force you to search for new energy sources, which is excellent news.
