Greece (Brussels Morning Newspaper), European officials may say they will proceed with an unprecedented package of sanctions, but the reality is very different. Brussels will need allies other than the United States, Canada, and Australia. They should affect an organization, which Moscow has cemented its agenda for years. Even without being a member.
Last month, European Union officials held unfruitful talks in Vienna with representatives of the Organization of the Petroleum Exporting Countries (OPEC).
OPEC has resisted calls from the US and the International Energy Agency to pump more crude to cool prices, which hit a 14-year high last month after Washington and Brussels imposed sanctions on Moscow in response to Russia’s invasion of Ukraine.
The EU intends to phase out Russian crude oil supplies within six months, and refined products by the end of 2022, as part of the new sanctions.
Australia, Canada, and the United States, which are less reliant on Russian supply than Europe, have already blocked Russian oil purchases. And they are adding daily pressure to the EU.
Paying a high price
As Europe considers a series of new measures, the new energy market will change radically in the coming months. The northern Member States are proposing a shift to alternative energy sources and green growth at all costs.
The rest of the member states still believe that the United States will replace Russian oil, even indirectly through Venezuela or other states.
The truth is that despite the war, the EU energy market has been running wild since the autumn of 2021, as a result of fossil fuel dependency. It is unacceptable that the member states rely on authoritarian regimes and violators of human rights internationally to fund/support their state energy needs and policies.
After almost three months of the Russian Invasion, Europeans still focus on the war, OPEC+, and wait for others to solve their problems. If the problem is the EU market and millions of citizens are suffering then reform is the only way. Not only in supply and production but also in international partnerships.
In the best scenario, Europe’s proposed ban on Russian oil could leave Moscow scrapping for $70 a barrel on a good day. However, Moscow will not remain idle as it will sell oil to China and India, shaping and upgrading the Asian energy market.
For the past 30 years, Europe has relied heavily on Russian raw materials to achieve high growth rates. Many argued that it was also a means for Moscow to play an active political and economic role in the Continent.
Now it is Asia’s turn to benefit as the countries have the financial resources to support Russia to a larger extent than Europe. The coming years will be very interesting if we consider the technological level of Asian countries, apart from the fact that more than half of the planet’s population lives there.
The Emirati-Saudi Alliance
The UAE and its neighboring Saudi Arabia are among the few OPEC members with enough resources and reserves that could be used to boost output and potentially compensate for supply losses from Russia or elsewhere.
Iraq or other African countries, members of the OPEC+ could not be regarded are trustworthy partners that can stabilise the market. Baghdad has already stated that the monthly increases as enough to address any potential shortage in the market as supply and demand were well balanced. The African companies lack the capacity and the investments to be able to supply the whole European continent.
Saudi Arabia and UAE have always been regarded as close partners to EU member states hosting various companies, and financial hubs, and signing deals of a broad spectrum. Even British Prime Minister Boris Johnson met Saudi Crown Prince Mohammed bin Salman (MBS) in Riyadh for talks aimed at weaning Britain off its reliance on Russian oil and gas supplies during March. The talks, like all the rest of the closed-door discussions, proved fruitless.
The UAE’s ambassador to Washington, Yousuf Al Otaiba stated that Abu Dhabi favored an increase in oil production and would encourage OPEC to consider higher output. At the same time, the communication coming from the capital was that the Gulf state would not act on its own to raise production and remained committed to the OPEC+ policy.
Last year Atlantic Council’s Amjad Ahmad called the two allies “frenemies”, in a relationship characterized by simultaneous competition and collaboration. The question risen is which is going to be the future relationship of Brussels with the two unreliable partners?