Energy factors of current Russian foreign policy toward Ukraine and Western Democratic Community

By: Nika Chitadze

Professor of the International Black Sea University       

Director of the Center for International Studies 

President of the George C. Marshall Alumni Union, Georgia - International and Security Research Center 

        

One of the main reasons for Russia's aggressive policy against Ukraine and the international community is the energy factor. In particular, in the modern period, the world price of oil has reached its highest level within the last seven years, for example, on February 22, 2022, the price of a barrel of oil on international exchanges reached $ 91.42. It should be mentioned that about 30-35% of Russia's budget revenue comes from the profits from oil exports.

Furthermore, in 2021 Russia exported about 168 billion cubic meters of natural gas to Europe, bringing to the Kremlin an annual revenue of about 400 billion euros.

It is noteworthy that before the attack on Georgia in 2008, in July of the same year, the price of a barrel of international oil reached $ 147 per barrel, as a result of which Russia's foreign exchange reserves exceeded $ 640 billion. And during the occupation of Crimea in March 2014, the price of 1 barrel of oil exceeded $ 100. It is also noteworthy that the sanctions imposed by the West after the occupation of Crimea did not take into account the energy aspects at all, moreover, it was constructed the new gas pipeline North Stream – 2 between Russia and Germany on the bottom of the Baltic Sea with a capacity of 55 billion cubic meters of natural gas. Russia has also reached an agreement with OPEC member states to form an informal alliance (OPEC +), which envisions a policy coordinated in regulating world oil prices between Russia and OPEC oil producer countries.

As a result of the export of energy resources, Russia manages to attract the financial resources that it uses for further military purposes, including, for example, the deployment of a military contingent of about 190,000 military servicemen around Ukraine and the blackmailing of the West by this way.

Given the above, Western sanctions against Russia and the Kremlin's policy should be aimed primarily at finding alternative ways to reduce world oil prices and import natural gas from Russia. For example, it should not be forgotten that the collapse of the Soviet Union in the last century, started as a result of the policy pursued by US President Ronald Reagan (conducting negotiations with Saudi Arabia, etc.), which led to a decrease in world oil prices in the second half of the 80s. Price on “black gold” fell from $ 25 to $ 10 per barrel, while revenues from Soviet oil exports decreased by 73% between 1986 and 1989. At the same time, the budget deficit of the USSR increased by five times between 1985 and 1988. Consequently, if pursuing a coordinated energy policy by the West against Russia, history may repeat itself.