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2. Energy investment in a time of inflation
- Author:
- Charles Lichfield and Joseph Webster
- Publication Date:
- 01-2023
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- High rates of inflation across the world are forcing central banks to reluctantly tighten monetary policy despite accompanying recession risks. Moreover, restricted credit access could jeopardize energy investments, particularly for capital-intensive clean energy projects, potentially rendering the world more vulnerable energy to price shocks, which are a significant contributor to the current crisis. This paper briefly considers the macroeconomic drivers of inflation in late 2022, including Russia’s war in Ukraine and uncertainties around energy supply, supply-chain resets, and lingering COVID-19 disruptions, before examining the persistent energy underinvestment of the past decade and how this has left markets exposed to varying degrees. As such, this paper also considers how private capital can accelerate cleaner energy adoption, suited to different markets’ unique conditions and needs. Borrowing costs will rise, but this doesn’t have to bring the transition to a standstill. With the Great Moderation of low volatility, interest rates, and inflation perhaps a relic of the past, assets offering inflation protection, such as infrastructure, may become increasingly attractive to investors. There is a fear that global inflation will sharply curtail energy investment into emerging markets. The fear is justified. Higher interest rates in developed markets mean higher rates of return which will lure emerging markets investors back to the US and Europe. Still, it’s not all bad news for emerging markets. Quasi-state actors like Pension and Sovereign Welfare funds are interested in very long term, high-yield projects—two criteria to which emerging market energy infrastructure correspond. Disruptions to interest rates and inflation, triggered in part by energy underinvestment, will cause disparate impacts in different markets. Inflation is not, perhaps, everywhere and always a monetary phenomenon. Energy investment faltered from 2014 to 2020, despite low interest rates. Meanwhile, aggregate supply shocks—first due to COVID, then from Putin’s invasion of Ukraine—have pressured energy production and prices, raising inflation and necessitating interest rate hikes. The consequences of persistent energy underinvestment are now becoming apparent. The need for new energy infrastructure cannot be met without private investment. This was the case when inflation was lower; it is even more important now.
- Topic:
- Environment, Markets, Oil, Governance, Gas, Economy, Investment, Inflation, and Energy
- Political Geography:
- Global Focus
3. What needs to change for green funds to be truly green
- Author:
- Jan Fichtner, Robin Jaspert, and Johannes Petry
- Publication Date:
- 03-2023
- Content Type:
- Policy Brief
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- Green investment funds are growing rapidly. However, their impact on climate change mitigation and sustainability remains unclear. Recent research has identified key shortcomings that need to be addressed in order to reduce greenwashing and make these funds truly green. Green finance is playing an ever more prominent role in recent years. Environmental, social and governance (ESG) funds, which constitute a key pillar of green finance, saw record inflows of hundreds of billions of US-dollars in recent years, primarily by retail investors. Essentially, these ‘green’ funds are integrating environmental, social and governance criteria, such as greenhouse gas emissions, labour rights and gender diversity into their investment strategy. They claim to invest less in the stocks of firms that are highly polluting or have bad governance practices, and instead buy the shares of corporations that appear to be more sustainable. In industry and policy debates, ESG funds are often cited as advancing the promotion of sustainability and helping to address climate change. However, the ESG concept, its underlying criteria, and its potential effects are highly controversial. Many critics see ESG primarily as ‘window dressing’, with no significant positive impact – either for the environment or for investors and employees.
- Topic:
- Climate Change, Environment, Oil, Gas, Capitalism, Sustainability, and Minerals
- Political Geography:
- Global Focus
4. Existing Dispute: Does the new budget set the stage for a fresh phase of conflict in Iraq?
- Author:
- FARAS
- Publication Date:
- 06-2023
- Content Type:
- Policy Brief
- Institution:
- Future for Advanced Research and Studies (FARAS)
- Abstract:
- On 12 June, 2023, Iraq's Council of Representatives approved a three-year budget (2023-2025) of 198.9 trillion dinars (USD 153 billion), including the budget for Iraq's Kurdistan region. This came around three months after the government filed the draft budget, making it the largest in Iraqi history.
- Topic:
- Development, Oil, Budget, Domestic Politics, Public Spending, and Parliament
- Political Geography:
- Iraq, Middle East, and Kurdistan Region of Iraq (KRI)
5. Baghdad and Erbil: A difficult road to settling differences
- Author:
- FARAS
- Publication Date:
- 01-2023
- Content Type:
- Policy Brief
- Institution:
- Future for Advanced Research and Studies (FARAS)
- Abstract:
- The relationship between Baghdad and Erbil lately has reached a dead end. The rift between the Kurdistan Regional Government (KRG), the official executive body of the autonomous Kurdistan Region of northern Iraq, and the Federal Government of Iraq (FGI) has, for the past few months, entered a bottleneck driven by political turmoil and rotating governments. But efforts are being made on both sides to bridge differences. On January 11, a Kurdish delegation headed by Masrour Barzani visited the central government in Baghdad to discuss a number of disputed files. The group included several senior officials: ministers for electricity and finance; chief of the cabinet office; director of the office of the region's prime minister; ministers for planning and oil; economic advisors; general counsel; director of border control; and CEO of State Organization for Marketing of Oil (SOMO Oil).
- Topic:
- Oil, Treaties and Agreements, Budget, Gas, and Domestic Politics
- Political Geography:
- Iraq, Middle East, and Kurdistan Region of Iraq (KRI)
6. Autonomy Curbed? Kurdish Oil Exports Hit Snags from Turkey and Baghdad
- Author:
- Joshua Krasna
- Publication Date:
- 07-2023
- Content Type:
- Working Paper
- Institution:
- Moshe Dayan Center for Middle Eastern and African Studies
- Abstract:
- In this new edition of Tel Aviv Notes, Josh Krasna examines the implications of the closure of the pipeline that delivered oil from the Kurdistan Regional Government of Iraq to Turkey's Ceyhan port, focusing on the state of relations between Erbil and Baghdad.
- Topic:
- Oil, Economy, Exports, and Autonomy
- Political Geography:
- Iraq, Turkey, Middle East, and Kurdistan Region of Iraq (KRI)
7. Big Changes in United Arab Emirates Foreign Policy
- Author:
- Joshua Krasna
- Publication Date:
- 04-2023
- Content Type:
- Commentary and Analysis
- Institution:
- Foreign Policy Research Institute
- Abstract:
- After a decade of activist policies in the region following the Arab Uprisings, Emirati foreign policy has undergone massive shifts in the past two years. The United Arab Emirates (UAE) has de-escalated and normalized relations with four of the major, and competing, states in the region—Iran, Israel, Turkey and Qatar—as well as with Syria. The UAE is taking a more non-aligned and mediating position in regional and wider issues. The Emirati leadership has made significant progress in using their energy-derived wealth to diversify their economy and ensure retaining a leading position in the world economy in the post-fossil fuels era. Abu Dhabi’s foreign policy is driven, in part, by a perceived need to adapt to a multipolar, “post-American” reality in the region. The country has been irritated, but largely unmoved, by America’s attempts to enlist or coerce them into supporting its policies with respect to Russia and China. The UAE has gained from the crisis between Russia and the West. Oil prices have risen, Russian capital has flown into Emirati financial institutions and investments, and the country has seen a flood of hundreds of thousands of Russian visitors and new residents, leading to a real estate boom.
- Topic:
- Foreign Policy, Oil, Leadership, Arab Spring, and Regional Politics
- Political Geography:
- United Arab Emirates and Gulf Nations
8. Autonomy Curbed? Kurdish Oil Exports Hit Snags from Turkey and Baghdad
- Author:
- Joshua Krasna
- Publication Date:
- 07-2023
- Content Type:
- Commentary and Analysis
- Institution:
- Foreign Policy Research Institute
- Abstract:
- For the past three months, the Kurdish region in northern Iraq and its government, the Kurdish Regional Government (KRG) have been facing one of the most serious challenges in the two decades of its formal existence. The pipeline through which it exports some 400,000 barrels of oil a day (b/d) – 10 percent of the overall Iraqi exports and 0.5 percent of global production – has been closed since March 25, at an estimated cost of close to a billion dollars a month (approximately $30 million daily). The KRG has depended on income from oil exports for some 80 percent of its budget. The stoppage came after a decade-long arbitration between the Government of Iraq (GOI) and Turkey by the Paris-based International Chamber of Commerce was decided in March in Iraq’s favor. Turkey was ordered to cease loading Kurdish oil without GOI supervision, and to pay Baghdad $1.5 billion in owed fees (Baghdad had demanded $30 billion). Baghdad had claimed that use of the pipeline from northern Iraq to the port of Ceyhan in Turkey by the Kurds without GOI consent was in violation of a bilateral agreement between the two countries from 1973, the annex of which states Turkey would only buy oil from Iraq’s state-owned oil marketer.
- Topic:
- Oil, Economy, Exports, and Autonomy
- Political Geography:
- Iraq, Turkey, Middle East, and Kurdistan Region of Iraq (KRI)
9. Keeping the lights on: The EU’s energy relationships since Russia’s invasion of Ukraine
- Author:
- Szymon Kardas
- Publication Date:
- 05-2023
- Content Type:
- Policy Brief
- Institution:
- European Council on Foreign Relations (ECFR)
- Abstract:
- Since the start of Russia’s all-out invasion of Ukraine, the EU has sought to rapidly reduce its dependence on Russian gas and oil. Many alternative major suppliers to Europe stepped up as ‘friends in need’ in the first year of the war, helping the EU plug the gap. The EU’s climate goals direct it to encourage the development of renewable energy sources – meaning it must also cultivate ‘friends indeed,’ which can supply clean energy as well as gas and oil. The countries best able to fulfil both short-term needs and long-term ambitions are Norway and the US, which have stable supplies of gas and are making progress in clean energy. The EU and member states have the instruments and investment resources to advance the potential of other supplier countries as well – to help them too transform from ‘friends in need’ to ‘friends indeed.’
- Topic:
- Climate Change, Oil, European Union, Gas, Energy, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, Eurasia, and Ukraine
10. Petroleum and Progress in Iran: An Interview with Gregory Brew
- Author:
- Mirek Tobiáš Hošman and Gregory Brew
- Publication Date:
- 11-2023
- Content Type:
- Commentary and Analysis
- Institution:
- The Toynbee Prize Foundation
- Abstract:
- Between the 1940s and the 1960s, Iran developed into the world’s first petro-state. In the recently published Petroleum and Progress in Iran: Oil, Development, and the Cold War (2022, Cambridge University Press), author Gregory Brew argues that Pahlavi petro-state emerged from a confluence of global and local forces in the context of the Cold War, the global oil economy, and the nascent practice and discourse of international development assistance. The Toynbee Prize Foundation interviewed Gregory Brew on the main arguments and events of his book. Next to providing a brief chronology of the political and economic development of Iran in post-WW2 decades – including the episode of the failed attempt to nationalize Iranian oil industry in the early 1950s followed by the coup d’état in 1953 – Brew explained the concept of dual integration introduced in his book, which tries to account for both local and global integration of the Iranian oil industry. He also highlighted the role of the international development actors, including the World Bank, American developmentalists and development economists in shaping the Pahlavi regime and the Iranian development project.
- Topic:
- Development, Oil, History, and Industry
- Political Geography:
- Iran and Middle East
11. PLUS Politics: Tackling the EIA Impact Gap
- Author:
- Columbia Centre on Sustainable Investment
- Publication Date:
- 02-2022
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Oil, gas, and mining projects can be profoundly disruptive to lives and livelihoods and damaging to air, water, soil, and vegetation. Evidence of this abounds across the world, from the Niger Delta and the Gulf of Mexico to Brumadinho, Brazil, and Porgera, Papua New Guinea. Understanding and addressing the social and environmental repercussions of EI development projects is crucial for avoiding or effectively managing such negative outcomes and fostering sustainable development. To date, environmental impact assessment (EIA) processes have been the cornerstone of efforts to identify and address social and environmental impacts of proposed development projects, including extractive industry projects and associated infrastructure. In practice, however, crucial aspects of these processes — the production of EIAs, consultations around the findings and implications of reports, and the actual use of the content of reports to inform key project decisions — are at times considerably distorted by power and incentive dynamics rooted in the political economy of a given context. The result is too often watered-down “box-ticking” exercises in which the impact of the EIA process on actual social and environmental protection can be greatly reduced. Technocratic approaches that emphasize best practices and capacity will not improve the performance of EIA processes on their own. Politically savvy approaches are needed to address the political challenges associated with EIAs, as even the most technically sound and capacitated EIA processes can be derailed by political factors. This brief is based on a longer chapter on the topic produced for a United Nations Environment Programme (UNEP) publication on development corridors.1 It aims to present the gaps between various aspects of the theory and practice of EIAs, explore some of the ways in which political factors may be contributing to these gaps, and suggest how future work on social and environmental protection and management might better account for political context in hopes of achieving greater impact.
- Topic:
- Climate Change, Energy Policy, Environment, Oil, Natural Resources, Gas, and Mining
- Political Geography:
- Global Focus
12. New Producer Contract Terms and Uncertainty: Lessons From the Recent Past
- Author:
- Patrick Heller, Perrine Toledano, Tehtena Mebratu-Tsegaye, and David Mihalyi
- Publication Date:
- 03-2022
- Content Type:
- Special Report
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- The petroleum industry is volatile, and governments in “new producer” countries have operated at a significant information disadvantage when negotiating with international oil companies. This challenge is growing today; new producer countries face intensifying questions around whether to offer fiscal incentives to maintain investment in the face of 1) the pandemic-induced volatility in oil prices and 2) long-term questions about the future of the industry in the face of the climate crisis and the global energy transition. This confluence of short-term and long-term uncertainty is prompting a reexamination of the narrative that once took hold in many new producer countries. The traditional story was one of linear progression from being non-producers to small levels of production to ultimately having oil and gas become a major economic contributor over the long term. This notion of progression was associated with a commonly held theory: After a country’s first major discovery, the geological risk that wells will be dry was expected to decrease. Countries could therefore shift from a position of having to grant tax breaks (and other concessions) to international investors, to taking a tougher stance in laws and negotiations for new projects going forward. In this paper we examine whether this theory has been borne out in practice and make recommendations to support new producers in their navigation of the uncertainty associated with the energy transition. Among the eight “new producer” countries, for which we analyzed a total of 26 contracts signed before and 25 contracts signed after discovery events (all occurring between 2001 and 2014), the evidence is mixed. Only three of the eight countries in our sample—Ghana, Mozambique and Uganda—demonstrated a clear pattern in the direction of more stringent terms in post-discovery contracts. They featured definitive steps to increase some of the obligations of contractors to the state, and no significant terms that became less stringent. Five out of eight countries did not meaningfully alter their approach to gain greater concessions from their company partners.
- Topic:
- Energy Policy, Oil, Governance, Gas, and Private Sector
- Political Geography:
- Uganda, Africa, Mozambique, and Ghana
13. North Africa Can Reduce Europe's Dependence on Russian Gas by Transporting Wasted Gas Through Existing Infrastructure
- Author:
- Mark Davis, Perrine Toledano, and Thomas Schorr
- Publication Date:
- 03-2022
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- North Africa can reduce Europe's dependence on Russian gas by transporting wasted gas through existing infrastructure.
- Topic:
- Energy Policy, Oil, Military Strategy, Natural Resources, Gas, and Conflict
- Political Geography:
- Africa, Russia, Europe, and Ukraine
14. Gaining Ground in the Struggle Against Extractivism
- Author:
- Antulio Rosales and Claudia Rodríguez Gilly
- Publication Date:
- 03-2022
- Content Type:
- Commentary and Analysis
- Institution:
- The North American Congress on Latin America (NACLA)
- Abstract:
- From oil to mining, resource exploitation is the central battlefield for Venezuela’s land and environmental movements.
- Topic:
- Environment, Oil, Natural Resources, Social Movement, Mining, Land, and Extractive Industries
- Political Geography:
- South America and Venezuela
15. Petroleum Industry Diversification in the Middle East and Its Policy Implications for Korea in the Era of Energy Transition
- Author:
- Kwon Hyung Lee, Sung Hyun Son, Yun Hee Jang, Kwang Ho Ryou, and Dawoon Lee
- Publication Date:
- 04-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- The GCC oil exporters including Saudi Arabia and the UAE are under strong pressure to prepare for decreasing global oil demand in the era of energy transition and carbon neutrality. To overcome these challenges, they need to diversify their industrial structure and develop low carbon technologies such as green hydrogen and CCUS (Carbon Capture, Utilization and Storage). This research is aimed to examine various mid-to-long term plans, industrial policies, and business cooperation cases to promote diversification in the Middle Eastern petroleum industry, suggesting policy proposals for cooperation between Korea and the Middle East and business opportunities in the region.
- Topic:
- Oil, Business, Diversification, Industry, Carbon Emissions, and Energy
- Political Geography:
- Middle East, Asia, and South Korea
16. HOW GERMANY’S COALITION CHANGE CONTRIBUTED TO PUTIN’S STRATEGIC MISCALCULATION IN UKRAINE
- Author:
- Debra Leiter and Rebecca Best
- Publication Date:
- 02-2022
- Content Type:
- Commentary and Analysis
- Institution:
- Political Violence @ A Glance
- Abstract:
- Vladimir Putin almost certainly failed to anticipate that Germany would be willing to sacrifice the benefits of cheaper Russian gas to punish Russian aggression in Ukraine. But Tuesday, German Chancellor Olaf Scholz indefinitely paused certification of the completed Nord Stream 2 pipeline to “reassess” the situation. While the move didn’t stop Putin from invading Ukraine—by that point Putin already had too much skin in the game to risk the loss of face from backing down—it has substantially raised the costs for Russia. Why did Germany do this, and why didn’t Putin see it coming?
- Topic:
- NATO, Oil, War, Gas, and Strategic Interests
- Political Geography:
- Russia, Europe, Ukraine, and Germany
17. Venezuela Oil Sanctions: Not an Easy Fix
- Author:
- Luisa Palacios and Francisco J. Monaldi
- Publication Date:
- 03-2022
- Content Type:
- Commentary and Analysis
- Institution:
- Center on Global Energy Policy (CGEP), Columbia University
- Abstract:
- Russia’s invasion of Ukraine has upended global energy markets and brought energy security issues back to the forefront of global attention. The unexpected visit of a US government delegation to Caracas for talks with Nicolas Maduro on March 5th may be considered an example of official recognition of this imperative.[1] The visit led to speculation that sanctions on the Maduro regime could be lifted and that a rapid ramp up of Venezuelan oil production and export could result.[2] This commentary makes three arguments concerning these recent developments. First, rather than potentially leading to the lifting of US sanctions on the Maduro regime, the visit could result in – provided certain conditions are met – an easing or softening of existing oil sanctions via licenses for some of the international oil companies (IOCs) that still operate in Venezuela.[3] Second, in the short term, it is unlikely that this scenario, should it come to pass, would offer any meaningful relief to global oil markets, as substantial increments in oil production from Venezuela would require overcoming many obstacles and risks, even with a potential softening of oil sanctions. However, the latter would likely lead to the redirection of Venezuela’s existing oil exports to the US market. Third, Venezuela has already seen a recovery of oil production, albeit from historically low levels. In a context of no sanctions relief, continued recovery is not guaranteed and might depend on how geopolitical events impact Russian oil exports and the outcome of the Iranian nuclear negotiations.
- Topic:
- Energy Policy, Oil, Natural Resources, and Sanctions
- Political Geography:
- South America and Venezuela
18. Sanctions and the Economic Consequences of Higher Oil Prices
- Author:
- Christof Ruhl
- Publication Date:
- 04-2022
- Content Type:
- Commentary and Analysis
- Institution:
- Center on Global Energy Policy (CGEP), Columbia University
- Abstract:
- Sanctions against the Russian Federation are developing so fast that it is hard to keep track of them and even harder to see a consistent narrative as events unfold. But there is one. Russia is the world’s largest exporter of energy and commodities. A persistent balance of payment surplus is the source of its financial strength, in terms of both current income and the financial assets previously accumulated by “fortress Russia.” Oil, gas, and coal exports constitute the most valuable revenue streams and are therefore prime targets of sanctions policy.[1] The problem is that energy sanctions will backfire badly if they lead to price increases large enough to derail the economic performance of sanctioning countries.
- Topic:
- Economics, Energy Policy, Oil, Natural Resources, and Sanctions
- Political Geography:
- Global Focus
19. Saving Energy in a Hurry Reducing Dependence on Russian Hydrocarbons Requires Resolute Demand and Supply Sides Action
- Author:
- Cédric Philibert
- Publication Date:
- 03-2022
- Content Type:
- Policy Brief
- Institution:
- Institut français des relations internationales (IFRI)
- Abstract:
- Facing Russia’s aggression on Ukraine, European countries have enacted economic and financial sanctions against Russia. • However, heavily dependent on Russian gas, European countries fear possible countersanctions. • On the other hand, Russia is heavily dependent, first and foremost, on oil exports, but also, yet to a lesser extent, on gas exports to Europe. Oil and gas represent more than half its total export revenues. • European countries should distinguish two policy needs: reducing their dependence on Russian gas to mitigate the impacts of possible countersanctions; reducing the demand for Russian oil to increase the economic pressure on Russia. • Reducing demand for Russian oil can be much easier for European countries to endure and can be done immediately with an active involvement of the civil society, from companies to citizens. It would ease the cost impacts on European citizens and give them ways to express their solidarity with Ukraine.
- Topic:
- Security, Oil, Sanctions, European Union, and Gas
- Political Geography:
- Russia, Europe, and Ukraine
20. Global oil theft: impact and policy responses
- Author:
- Etienne Romsom
- Publication Date:
- 02-2022
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper, the first of two on global oil theft and fraud, discusses the prevalence, methods, and consequences of global oil theft, valued at US$133 billion per year and equivalent to 5–7 per cent of the global market for crude oil and petroleum fuels. However, the impact of oil theft is significantly larger than the value of theft itself. Government tax yields have been assessed for 30 developing countries associated with oil theft and found to be significantly lower than in the International Monetary Fund’s benchmark study. Oil theft, smuggling, and illicit trade in petroleum products are often seen as lesser forms of crime than human trafficking, the drugs trade, smuggling of weapons, kidnapping, and terrorism. However, oil theft as an act of opportunity tends to evolve into organized crime and, if left unchecked, oil theft may interlink with other organized crime activities and groups. Actions against oil theft should target the transnational crime syndicates that continue to find ways to replicate their thefts by adapting their theft strategies and business models. However, there is a lack of basic data, including how much oil is stolen, how the stolen oil is transported, and how illicit oil transactions are conducted. The mixing of legal commercial operations with illegal oil theft activities and fraud obscures many oil theft crimes.
- Topic:
- Corruption, Oil, International Crime, and Tax Evasion
- Political Geography:
- Global Focus
21. Countering global oil theft: responses and solutions
- Author:
- Etienne Romsom
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This second of two papers on global oil theft discusses ways to reduce oil theft, misappropriation, and fraud. At US$133 billion per year, oil is the largest stolen natural resource globally, while fuel is the most smuggled natural resource. Oil theft equates to 5–7 per cent of the global market for crude oil and petroleum fuels. It is so engrained in the energy supply chain that thefts are priced in by traders and tolerated by many shipping companies as petty theft. Oil theft and related insecurity have substantial negative economic effects on developing countries, whether they produce oil or not. In 2012, non-oil-producing Benin saw a 28 per cent drop in taxable income after a spate of oil tanker hijacking incidents in the Gulf of Guinea in 2011. In Nigeria, the oil capacity shut-in and amount of oil deferred is more than twice the amount estimated as stolen, with a US$20 billion annual loss in petroleum profit tax—63 per cent of total government tax revenue in 2019. Organized oil crime syndicates are often transnational and conduct theft and fraud professionally, exploiting gaps in jurisdiction and adapting their practices when law enforcement becomes more effective. They evolve from ship piracy to stealing tanker cargoes to kidnapping tanker crews; from physical ransom of assets to digital hijacking via ransomware. The proceeds of oil theft often finance other organized crime, and it triggers violence against the community and in crime-on-crime activities. Twelve commonalities in oil theft and fraud have been identified that can direct international solutions, in three target areas: stolen oil volumes, stolen oil transport, and stolen oil money. Prosecution for acts of bribery offers opportunities for action: transport of or payment for illegal oil could constitute a bribe under the US Foreign Corrupt Practice Act if government officials were involved in the transaction or shipment. Bribe charges could be raised for paid ‘services’ that facilitate oil theft (through action or non-action).
- Topic:
- Corruption, Oil, Piracy, Cybersecurity, Fossil Fuels, Tax Evasion, and Theft
- Political Geography:
- Global Focus
22. Cutting Putin’s energy rent: ‘smart sanctioning’ Russian oil and gas
- Author:
- Georg Zachmann, Guntram Wolff, Agata Łoskot-Strachota, Simone Tagliapietra, Axel Ockenfels, Ricardo Hausmann, and Ulrich Schetter
- Publication Date:
- 04-2022
- Content Type:
- Working Paper
- Institution:
- Bruegel
- Abstract:
- In the wake of the Russian aggression against Ukraine, major sanctions have been imposed by Western countries, most notably with the aim of limiting Russia’s access to hard international currency. However, Russia remains the world’s first exporter of oil and gas, and at current energy prices this provides large hard currency revenues. As the war continues, European governments are under increased pressure to scale-up their energy sanctions, following measures taken by the United States, the United Kingdom, Canada and Australia. Given the inelasticity of Russia’s oil and gas supply, the most efficient way for Europe to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexibly to control the degree of economic pressure on Russia.
- Topic:
- Oil, Sanctions, Gas, Vladimir Putin, and Energy
- Political Geography:
- Russia, Eurasia, and Ukraine
23. How to make the EU Energy Platform an effective emergency tool
- Author:
- Walter Boltz, Klaus-Dieter Borchardt, and Thierry Deschuyteneer
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- Uncertainty about the supply of Russian natural gas is causing extremely high and volatile European gas and electricity prices. European Union countries may struggle to import sufficient volumes of natural gas at reasonable prices. During the summer, the imperatives are to fill storage sites sufficiently in a coordinated manner and to organise sufficient import volumes to replace a substantial share of gas that might no longer come from Russia. Coordination is essential to ensure that disruptions during difficult winter months do not lead to a break-up of the EU internal gas market with potentially serious political repercussions. One part of the EU response is establishment of an EU Energy Platform for the purchase of gas, LNG and hydrogen. This aims to pool demand to leverage the bloc’s economic clout, international outreach to reliable partners and efficient use of existing infrastructure. EU leaders have backed the plan but it has not yet been translated into a feasible scheme. The platform should be developed into an effective emergency tool to safeguard gas supply in case Russian flows stop. We detail two complementary proposals to achieve this. First, there should be EU-wide auctioning of remuneration for filling storage sites in specific regions. Companies would remain responsible for all stages of the value chain, benefitting from remuneration and in return offering the market operator some control over how this gas is released during winter months. Second, EU demand for additional LNG quantities, and the sourcing of this on international markets, should be coordinated through a platform, creating a transparent market for these volumes. These mechanisms would resolve the prevention paradox and prevent free-riding. If EU countries buy gas jointly, they will find it much easier to let markets allocate scarce volumes across borders in case of a complete stop to Russian supplies. . This would reduce the risk of energy market fragmentation, as well as the subsequent energy security, economic and political impacts of a shock that would hit member states very differently.
- Topic:
- Oil, European Union, Gas, and Energy
- Political Geography:
- Russia, Europe, and Ukraine
24. The impact of stakeholder management on the oil and gas industry in Africa: A case study of oil companies and African host communities
- Author:
- Nnaemeka Madumere
- Publication Date:
- 01-2022
- Content Type:
- Journal Article
- Journal:
- African Journal on Conflict Resolution
- Institution:
- The African Centre for the Constructive Resolution of Disputes (ACCORD)
- Abstract:
- The oil and gas industry is regarded as one of the most dynamic, complex and controversial industrial sectors and involves activities that generate a whole range of diverse viewpoints. This has resulted because the industry has several stakeholders who can influence and, at the same time, be impacted upon by activities associated with the value chain of oil and gas oriented business. However, one extremely important stakeholder is the community. Many researchers (Orsini 2016; Wall 2012; Mascarenhas 2011; Kinslow 2014; Boladeras, Wild and Murphy 2016) agree that the viewpoints of communities where oil and gas operations are carried out should be given high priority due to their significant influence over industry activities in their region, as well as the fact that they are the entities most impacted by these activities. This research examined notable conflicts experienced between oil companies and host communities in Africa with the aim to identify means by which relationships between the two aforementioned parties could be made cordial and sustainable. An integrated literature based research method and a case study strategy were adopted for this research. Two frameworks that will support organisations in effectively engaging and establishing cordial relationships with stakeholders were developed by the author; and the key findings of this research are that an effective means of establishing sustainable cordial relationships with host communities in Africa is by involving them in the ownership of operations in their region. This will naturally instill in them some sense of responsibility over the operations, which will in turn enable oil and gas companies to gain the trust, cooperation and support of host communities, as well as the social license to operate in their region. This relationship can be sustained if both parties work collaboratively to determine ways in which benefits from the operations may be maximised.
- Topic:
- Environment, Oil, Gas, and Stakeholders
- Political Geography:
- Africa
25. Impact of the Russia-Ukraine War on the Global Energy Policy
- Author:
- Mamuka Komakhia
- Publication Date:
- 07-2022
- Content Type:
- Special Report
- Institution:
- Georgian Foundation for Strategic International Studies -GFSIS
- Abstract:
- The Russia-Ukraine war has been going on for five months, and it can be said that it is a war that has changed the world, and not only in military and security terms. In this edition of “The Security Review”, we will discuss the food, energy, and transportation aspects of this conflict. Mamuka Komakhia deals with one of the most important aspects of the war - energy, and discusses Europe's dependence on Russian oil and gas and the possible scenarios to escape from it.
- Topic:
- Energy Policy, Oil, War, European Union, Gas, Exports, Energy Dependence, and Russia-Ukraine War
- Political Geography:
- Russia, Ukraine, and Eastern Europe
26. International Practice of Sanction Evasion and Circumvention Possibilities for Russia
- Author:
- Davit Shatakishvili
- Publication Date:
- 04-2022
- Content Type:
- Special Report
- Institution:
- Georgian Foundation for Strategic International Studies -GFSIS
- Abstract:
- Sanctions play a special role in the economic and political life of the world. Historically, despite their various forms of use, sanctions have acquired an essentially functional substance in the 20th century. The goal of the sanctions is primarily to ensure global peace. In case of violation of market principles, military aggression, or disregard for the rules established between nations, the violator is sanctioned by specific countries and/or groups of states, who, in doing so, aim to bring it back to the norms of international law. Sanctions increase political and economic pressure on the target country, which are reflected in various dimensions and quantitative figures. Consequently, the country loses some of its political leverage and experiences tangible economic regress. For the sake of universal peace and global security, the policy of sanctions has not lost its relevance in the 21st century. As a result of Russia’s aggressive military intervention in Ukraine, the world community has applied an unprecedented package of sanctions against the aggressor, which has spread to almost every industry of the country and is still being added to. In this regard, Russia broke the anti-record and surpassed countries such as North Korea, Iran, Syria, and Venezuela. Over the decades, sanctioned countries have accumulated extensive experience on how to circumvent the imposed sanctions, so as to at least partially help the country overcome the economic difficulties. It is interesting which ways and schemes such countries use to circumvent the restrictions, and based on that experience, what opportunities there are for the Russian Federation to do the same and evade the sanctions imposed on it, a move which will not only limit but also further pave the way for its aggressive foreign policy and threaten world peace.
- Topic:
- Security, Foreign Policy, International Trade and Finance, Oil, Sanctions, Global Markets, Cryptocurrencies, and Russia-Ukraine War
- Political Geography:
- Russia and Eurasia
27. The Ukraine War and the Middle East: The Rich Get Richer and the Poor Get Poorer
- Author:
- Paul Rivlin
- Publication Date:
- 07-2022
- Content Type:
- Working Paper
- Institution:
- Moshe Dayan Center for Middle Eastern and African Studies
- Abstract:
- In our latest issue of Iqtisadi, Paul Rivlin examines several economic issues occurring simultaneously in the Middle East and North Africa region mainly as a result of the Ukraine-Russia war. Higher oil prices are good for some countries and bad for others.
- Topic:
- Energy Policy, Oil, Economy, and Russia-Ukraine War
- Political Geography:
- Russia, Ukraine, and Middle East
28. Assessment of the role of Caspian Basin in reducing of EU's oil dependence in the light of Russian Ukraine War
- Author:
- CESD Research Team
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- Center for Economic and Social Development (CESD)
- Abstract:
- In the background of the Russian invasion of Ukraine, European Union (EU) agreed to ban the overwhelming majority of Russian oil imports. Since the beginning of the invasion, the West decided to make Moscow pay economically for its aggression. Nevertheless, the decision aimed at the energy sector was quite challenging since the bloc relies on Russia for 25% of its oil and 40% of its natural gas.
- Topic:
- Oil, European Union, Imports, Russia-Ukraine War, and Energy Sector
- Political Geography:
- Russia, Europe, Ukraine, and Caspian Sea
29. Amendments in the 2022 State Budget of Azerbaijan: Impacts and Perspectives
- Author:
- Nigar Islamli
- Publication Date:
- 07-2022
- Content Type:
- Working Paper
- Institution:
- Center for Economic and Social Development (CESD)
- Abstract:
- After the global pandemic, rising global demand, as well as the impact of geopolitical and military tensions, have led to a significant rise in the prices of major energy carriers in recent years. In the context of this pandemic, the recession in the country's economy in 2020 was replaced by the process of rapid economic recovery in 2021. The significant increase in oil prices in Azerbaijan had a positive effect on the nominal amount of GDP, although the increase in nominal GDP was mainly due to the oil sector, the real growth was possible almost due to non-oil sectors. The economic situation for the past period of the current year, the medium-term socio-economic forecast indicators, and the performance of budget revenues more than expected made it necessary to revise the state budget for 2022.
- Topic:
- Oil, Budget, GDP, Economy, and COVID-19
- Political Geography:
- Azerbaijan
30. FDI in Azerbaijan in 2021: Developments and Challenges
- Author:
- CESD Research Team
- Publication Date:
- 04-2022
- Content Type:
- Working Paper
- Institution:
- Center for Economic and Social Development (CESD)
- Abstract:
- Attracting foreign direct investment is now more important for Azerbaijan than ever before. Against the background of global uncertainty, the development of the non-oil sector and the diversification of the economy have become even more priority. On the other hand, there has been a decline in oil production in recent years, and even though high oil prices, the country's revenue from energy sales is lower than compared to the period before 2014.
- Topic:
- Oil, Foreign Direct Investment, Economy, and Diversification
- Political Geography:
- Azerbaijan
31. Assessment of Azerbaijani 2022 State Budget in Context of COVID-19
- Author:
- Narmina Gasimova
- Publication Date:
- 01-2022
- Content Type:
- Working Paper
- Institution:
- Center for Economic and Social Development (CESD)
- Abstract:
- The budget plan for 2022 envisages the primary goals for insurance of the economic growth in the upcoming year, emphasizing economic diversification as one of the key targets. Followed by the restoration of the liberated territories and recovery after the negative impact of the pandemic, the plan outlines a detailed analysis of fiscal policy forecasted for the year. An overview of the planned budget envisages the reliance of the economy on oil reserves and transfers obtained throughout it. To that end, approaches for further policies cover the creation of a favorable environment for the gradual replacement of oil revenues with non-oil revenues.
- Topic:
- Oil, Budget, Economic Growth, Diversification, COVID-19, and Revenue
- Political Geography:
- Azerbaijan
32. How Violent Conflicts Impact Women in Oil-Producing Niger Delta Communities: A Policy Perspective
- Author:
- Onyinyechukwu Durueke
- Publication Date:
- 02-2022
- Content Type:
- Policy Brief
- Institution:
- Social Science Research Council
- Abstract:
- This policy brief focuses on how women are affected by violent conflicts in the oilproducing Niger Delta region of Nigeria, including the coping mechanisms women victims adopt in conflict-affected communities. It draws on the findings of fieldbased research on the experiences of women in the aftermath of the military invasions of Odi1 and Gbaramatu,2 the leadership tussle in Rumuekpe,3 communal/ intra-ethnic conflict in K-Dere and B-Dere,4 communal conflict with a multinational oil corporation in Evwreni,5 and electoral violence in Imiringi. This brief also makes recommendations for addressing gender-based violence in the region.
- Topic:
- Energy Policy, Oil, Natural Resources, Women, Violence, and Gender
- Political Geography:
- Africa and Niger
33. Against the flow: Europe’s role in kickstarting Algeria’s green transition
- Author:
- Andrew Farrand
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- European Council on Foreign Relations (ECFR)
- Abstract:
- Russia’s war on Ukraine has reshaped European energy markets and lent new urgency to the EU’s decarbonisation plans, altering the incentives of the bloc’s energy partners. Surging demand for Algeria’s oil and gas exports has temporarily undercut pressure for domestic reform, including in the energy sector. But growing local energy consumption and European plans to reduce fossil fuel imports in favour of renewables threaten Algeria’s rentier system. The country’s leaders have taken only minimal steps to build renewable energy capacity and remain fixated on raising hydrocarbon investment. While Algeria has little spare capacity to increase its hydrocarbon exports in the short term, it holds far more promise for Europe as a long-term partner in renewable energy. Europe’s ambitious climate goals, deep pockets, and technical expertise make it well placed to help Algeria kick-start a robust energy transition – if the country chooses to go along. At a high-level energy dialogue this month, EU and Algerian officials will convene for the first of many discussions to reshape the future of their energy partnership.
- Topic:
- Climate Change, Oil, European Union, Gas, Exports, and Green Transition
- Political Geography:
- Europe and Algeria
34. NRGI Impact: Knitting the Fabric of Civil Society Activism in Tunisia (2013-2020)
- Author:
- Natural Resource Governance Institute
- Publication Date:
- 03-2022
- Content Type:
- Policy Brief
- Institution:
- Natural Resource Governance Institute
- Abstract:
- Tunisia is the only country to have accomplished a peaceful transition from authoritarianism after the Arab Spring uprisings, but its democratic gains are not yet entrenched. Tunisians have experienced persistent political instability and voter turnout has been waning—particularly among young people. The governance of extractive industries has influenced, and in turn been impacted, by both the prevailing political context and global dynamics. After the 2013 revolution, there was scant civil society capacity and limited focus on extractives, accompanied by low levels of trust of international partners. Tunisia’s oil and gas reserves are small compared to other resource-rich countries in the region. In addition, political instability and an uncompetitive fiscal regime led to a decline in foreign investment in the sector. As production and prices fell, oil and gas revenues dropped. In terms of mining, the country went from being the world’s fourth largest phosphate producer in 2010 to 20th in 2017. In 2020, amid the coronavirus pandemic, Tunisia resorted to importing phosphate. The production decline is due largely to recurring protests, particularly in the Gafsa phosphate mining basin, which led to regular mining stoppages. Local populations are frustrated because phosphate mining brings limited benefits, whether in terms of revenue, social spending by companies or employment opportunities. Similar dynamics prevail in the oilproducing region of Tataouine and other resource-producing areas. Political and institutional volatility has negatively impacted reform plans. The portfolio of the ministry in charge of extractive industries was modified or restructured five times and saw eight leadership changes between 2011 and 2016, including following corruption scandals. The ministry was restructured many time subsquently. These changes have contributed to faltering momentum and delayed reform. The pandemic has further exacerbated some of these challenges.
- Topic:
- Civil Society, Oil, Natural Resources, Gas, Arab Spring, and Activism
- Political Geography:
- North Africa and Tunisia
35. US Needs to Play Larger Role as Swing Producer of Oil and Gas in the Current Crisis
- Author:
- Thomas J. Duesterberg
- Publication Date:
- 11-2022
- Content Type:
- Special Report
- Institution:
- Hudson Institute
- Abstract:
- In response to Russian aggression in Ukraine, European nations have drastically reduced imports of crude oil, refined petroleum products, and natural gas from Russia. The 2021 levels of these energy imports were around 2.2 million barrels per day (mbd) of crude oil, 1.2 mbd of refined products, and 155 billion cubic meters (bcm) of natural gas on an annual basis.In addition to extreme difficulties in obtaining new sources of natural gas and to a lesser extent oil, the price increases throughout Europe since the onset of the war have been of historic proportions. In the days following the invasion, natural gas prices shot up by 62 percent, and UK energy prices were up by 150 percent. The full impact of the war, along with the related need to rein in the highest inflation numbers in over 40 years, has pushed Europe into a recession that threatens households and small businesses as well as European manufacturers’ ability to remain competitive. As a result, if the region cannot quickly assemble alternative supplies, the European commitment to assist in containing Russian aggression may weaken.
- Topic:
- Economics, Oil, Gas, Crisis Management, Supply Chains, Energy, and Russia-Ukraine War
- Political Geography:
- Europe, North America, and United States of America
36. Cutting Putin’s Energy Rent: ‘Smart Sanctioning’ Russian Oil and Gas
- Author:
- Ricardo Hausmann, Agata Łoskot-Strachota, Axel Ockenfels, Ulrich Schetter, Simone Tagliapietra, Guntram Wolff, and Georg Zachmann
- Publication Date:
- 04-2022
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- Following the Russian aggression against Ukraine, major sanctions have been imposed by Western countries, most notably with the aim of limiting Russia’s access to hard international currency. However, Russia remains the world’s first exporter of oil and gas, and at current energy prices this provides large hard currency revenues. As the war continues, European governments are under increased pressure to scale-up their energy sanctions, following measures taken by the United States, the United Kingdom, Canada and Australia. This piece argues that given the inelasticity of Russia’s oil and gas supply, for Europe the most efficient way to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexibly to control the degree of economic pressure on Russia.
- Topic:
- Economics, Oil, Sanctions, Exports, Currency, Energy, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, Ukraine, and North America
37. Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market
- Author:
- Yifei Cai, Valérie Mignon, and Jamel Saadaoui
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
- Abstract:
- This paper assesses the effects of US-China political tensions on the oil market. Relying on a quantitative measure of these relationships, we investigate how their dynamics impact oil demand, supply, and prices over various periods, starting from 1971 to 2019. To this end, we estimate a structural vector autoregressive model as well as local projections and show that political tensions between the two countries pull down oil demand and raise supply at medium- and long-run horizons. Overall, our findings show that conflicting relationships between these two major players in the oil market may have crucial impacts, such as the development of new strategic partnerships.
- Topic:
- Security, Oil, Conflict, Rivalry, and Energy Crisis
- Political Geography:
- China, Asia, North America, and United States of America
38. The Necessary U.S. Role in Fixing the Baghdad-Kurdistan Energy Dispute
- Author:
- Michael Knights
- Publication Date:
- 06-2022
- Content Type:
- Special Report
- Institution:
- The Washington Institute for Near East Policy
- Abstract:
- A targeted intervention could aid American interests and the global effort to find a substitute for Russian and Iranian oil and gas. On February 15, 2022, Iraq’s Federal Supreme Court ruled that the 2007 oil and gas law for the Kurdistan Region was unconstitutional, requiring a review of numerous production sharing contracts and oil sales agreements. If the case prevents oil exports via Iraqi Kurdistan, then the world market will almost immediately lose 500,000 barrels per day, triggering higher oil prices, expanded windfalls for Russia and Iran, the collapse of Iraqi Kurdistan’s economy, and a dangerous turn in Baghdad’s ties with Erbil and with Ankara. In this timely Policy Note, Iraq expert Michael Knights calls for the United States to act with other concerned states to resolve the Baghdad-Erbil energy crisis. In doing so, he categorizes the sub-issues of FSC implementation on a spectrum from higher to lower consensus, and explains both sides’ views in an unvarnished, direct manner. A targeted intervention by the United States and its partners, the author argues, could guide the dispute toward a long-overdue resolution that greatly aids U.S. interests and the global effort to find a substitute for Russian and Iranian oil and gas.
- Topic:
- Oil, Gas, Crisis Management, Disputes, and Energy
- Political Geography:
- Iraq, North America, United States of America, and Kurdistan Region of Iraq (KRI)
39. Biden Sees Oil as Key to His Visit, but Does Riyadh Agree?
- Author:
- Simon Henderson
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- The Washington Institute for Near East Policy
- Abstract:
- The administration has signaled its intentions for the trip well in advance, but the realities of Saudi oil capacity and global energy forecasts should temper any U.S. expectations of a quick fix. The centrality of energy security to America’s historical relationship with Saudi Arabia is under strain. When Saddam Hussein invaded Kuwait thirty-two years ago and threatened nearby Saudi oil fields, King Fahd ignored the pleas of cautious senior princes who wanted a delay to discuss the issue and instead requested Washington’s immediate help—which he quickly received in the form of half a million U.S. troops and a multinational force. It was a perfect illustration of the longstanding strategic understanding between the two governments: Saudi Arabia will supply the world with oil, and the United States will defend the House of Saud.
- Topic:
- Economics, Oil, Joe Biden, and Energy
- Political Geography:
- Middle East, Saudi Arabia, North America, and United States of America
40. Sense and Nonsense behind Energy Price Caps
- Author:
- Daniel Gros and Nathalie Tocci
- Publication Date:
- 07-2022
- Content Type:
- Commentary and Analysis
- Institution:
- Istituto Affari Internazionali
- Abstract:
- In official circles at the highest level, from the G7 to the European Council, a tense debate is taking place on what to do about spiralling gas and oil prices, which have either broken or have come dangerously close to breaking record territory. In Europe, a special meeting of the European Council on energy was originally scheduled for the fall, but is now being brought forward, while the European Commission is working on an emergency plan to prepare for a complete cut-off of Russian gas. Energy prices dominate the agenda of our leaders. Yet it is a confused and often confusing debate that is worth unpacking.
- Topic:
- Climate Change, Oil, Gas, and Energy
- Political Geography:
- Russia and Europe
41. The De-Globalisation of Oil: Risks and Implications from the Politicisation of Energy Markets
- Author:
- Rafael Ramírez
- Publication Date:
- 07-2022
- Content Type:
- Commentary and Analysis
- Institution:
- Istituto Affari Internazionali
- Abstract:
- The EU’s announced ban on Russian oil imports is a strong political measure that will heavily impact international energy markets, restricting the supply of 4.1 million barrels per day (mbd) of oil and derivates to a market which is a net importer of 10.72 mbd.[1] The EU’s ban, which is due to fully come into effect between December 2022 and February 2023, combined with the US’s previous ban of 600 thousand barrels a day (tbd), means that 4.7 mbd of Russian oil and derivatives are being removed from these high oil consuming markets (35.9 mbd in total). If we add the 1.3 mbd of oil that Iran has stopped producing due to US sanctions reintroduced in 2018, we reach a volume of 6 mbd of oil that is restricted or out of the market due to political decisions. The Russian invasion of Ukraine and the unprecedented sanctions and oil ban imposed on Moscow, combined with the previous oil sanctions against Iran, are fast advancing a new geopolitical reality: the de-globalisation of the international oil market.
- Topic:
- Oil, Sanctions, European Union, Energy, and Russia-Ukraine War
- Political Geography:
- Europe
42. Borders and transit countries: the re-territorialization of Middle East pipelines
- Author:
- Nino Luis Maduerira
- Publication Date:
- 10-2022
- Content Type:
- Journal Article
- Journal:
- Revista Brasileira de Política Internacional (RBPI)
- Institution:
- Instituto Brasileiro de Relações Internacionais (IBRI)
- Abstract:
- Following the discovery of vast oil reserves in the Persian Gulf region, the Middle East became the main hub for the expansion and development of western pipeline technology. Contrary to the borderless world described in some accounts of globalization, what is observed after 1956 is the establishment of hard political borders, directly under the oversight of national governments, for pipeline deployment with minimal boundary crossings. In the Middle East, this minimal permeability of frontiers entailed fewer risks compared with the uncertainties arising from having to cross several countries: the sovereign state thus seemed the best container for oil transportation. The conclusion puts forward the concept of re-territorialization to explain the multi-level changes that took place, entailing shifts in geography, in business structures and in international relations.
- Topic:
- Oil, Science and Technology, Natural Resources, Borders, and Transition
- Political Geography:
- Middle East
43. KRI positioned in prominent role in global gas markets
- Author:
- Ahmed Tabaqchali
- Publication Date:
- 11-2022
- Content Type:
- Special Report
- Institution:
- Atlantic Council
- Abstract:
- The Kurdistan Region of Iraq (KRI) has proven gas reserves of over 25 trillion cubic feet—or 20 percent of Iraq’s total proven reserves. Its current gas production of 5.4 billion cubic meters per year could nearly triple production by 2030 and even sextuple by 2040. This increase would meet current and future domestic KRI demand and generate essential export revenue for the region. The report, The Kurdistan Region of Iraq’s Gas-Export Potential: Deja Vu All Over Again, authored by senior fellow Ahmed Tabaqchali considers the potential of the KRI’s proven and probable gas reserves.
- Topic:
- Environment, Markets, Oil, Gas, Economy, and Energy
- Political Geography:
- Iraq, Middle East, and Kurdistan Region of Iraq (KRI)
44. Securing alternative gas supplies and addressing critical infrastructure gaps in Europe
- Author:
- Richard L. Morningstar, András Simonyi, Olga Khakova, and Paddy Ryan
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- The Kremlin’s weaponization of natural gas exports to Europe as winter approaches has shattered any illusions that Russia could be a reliable supplier. Europe urgently needs to import gas from other suppliers to heat its homes and power its industry. In doing so, Europe can build a more secure and sustainable energy system while cutting off funds for Moscow’s war machine. Painfully high energy prices are already having a serious impact on quality of life and economic development in Europe. New natural gas supplies and expanded interconnections to bring them to market will drive down the costs of energy and reduce the likelihood of social unrest over energy poverty. The surest means to end Russia’s energy leverage over Europe include accelerating the green transformation, curtailing gas demand, and boosting energy efficiency. However, the continent cannot implement these changes overnight. Gas remains instrumental in Europe’s transition from dirtier fossil fuels, electrification of power-hungry sectors, and integration of large-scale intermittent renewables. Natural gas will likely remain a critical part of Europe’s power baseload for at least the medium term. Procuring an adequate supply of gas in the short to midterm is not at odds with the energy transition. Europe must cultivate alternative suppliers, build non-Russian-oriented import infrastructure, and accelerate decarbonization in tandem to boost energy security and affordability. Sourcing gas from non-Russian suppliers will sustain longer-term decarbonization efforts and prevent regression back to dirtier fuels amid the energy crunch. To diversify their energy systems, European states must determine how much Russian gas can be replaced and from where, as well as what new infrastructure will be necessary to enable new imports. The European Union (EU) needs to clearly articulate the anticipated natural gas supply gap to identify investment opportunities for the relevant market players. This issue brief examines potential sources of alternative gas supplies, the infrastructure required to bring new supplies to European consumers, and the financial and regulatory mechanisms needed to support diversification efforts. It offers recommendations for measures that European countries decoupling their energy supplies from Russia should take to give themselves the best chances of succeeding.
- Topic:
- Environment, Markets, Oil, Gas, Energy, and Energy Transition
- Political Geography:
- Europe
45. The Price Cap on Russian Oil Exports, Explained
- Author:
- Catherine Wolfram, Simon Johnson, and Łukasz Rachel
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- If you’ve taken an introductory economics class, you were probably left with the strong impression that price caps are bad – they distort demand and discourage producers from supplying the market. So, why has Treasury Secretary Janet Yellen, the consummate economist, advocated so strongly for a price cap on Russian oil? The answer is that this price cap is different from the standard cap discussed in introductory economics classes. A standard price cap applies to all goods traded in a market. For example, in some countries there are price caps on bread for everyone or diesel for farmers or rent controls on housing. Such caps lead to excess demand for the good and insufficient supply, leading to shortages at the capped price. If prices are constrained, other non-price mechanisms, like first-come-first-served, are required to allocate the good. All too frequently, the result is empty bakery shelves or fuel shortages or difficulties finding housing. To understand why the cap on Russian oil is different, we first need to provide background on Russian oil trade and the proposed price cap.
- Topic:
- Economics, Markets, Oil, Exports, and Russia-Ukraine War
- Political Geography:
- Russia and Europe
46. With energy at play in the Ukraine war, everybody pays
- Author:
- Izabela Surwillo and Veronika Slakaityte
- Publication Date:
- 03-2022
- Content Type:
- Policy Brief
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- Despite sustained efforts to turn towards the West, as a major transit country dependent on cheap gas, Ukraine has been particularly vulnerable to Russian pressure. Now, with the outbreak of war in Ukraine, the EU’s problematic dependence on the Russian petrol state is under stress, as diversification of energy supply from non-Russian sources in the wake of war will incur high economic costs for the EU in the near future. The Russian attack on Ukraine has put the EU’s lenient policy towards Russia into question and has highlighted its problematic overdependence on Russian oil and gas. On the 12th day of the war in Ukraine, with Russia under tough Western sanctions, Russian Deputy Prime Minister Alexander Novak stated: ‘We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.’ The International Energy Agency (IEA) has urged the EU neither to extend nor to sign new contracts with Gazprom. Meanwhile the EU is exploring policy options for diversification of gas supply. Russia currently supplies over 40% of the EU’s gas and nearly a third of its oil, leaving the EU exposed to economic and political pressure. Energy blackmail primarily concerns gas supply, as replacing Russian gas with other sources cannot be executed immediately due to insufficient gas infrastructure and market conditions (i.e. limited availability of liquified gas). While oil can be transported by land and sea, meeting the EU’s energy demand will nevertheless require both diversification of energy supply routes and speeding up of its energy transition. This process will prove challenging and costly. Phasing out the EU–Russia energy cooperation after the Russian invasion of Ukraine also marks a major shift in continental energy politics that affects all the parties. For Russia, the loss of the European market implies a huge loss of revenue and a deepening future dependence on China. Ukraine finds itself once again caught in the middle. For years Ukraine increasingly sought greater energy independence from Russia and deeper integration with the EU energy market. Meanwhile, the construction of pipelines such as Nord Stream 2, circumventing Ukraine as a transit state for Russian gas, made Ukraine even more vulnerable because it sent a clear signal to Moscow that energy trade with Europe would not cease, even following the annexation of some Ukrainian territories by Russia in 2014. During the current war, Moscow is claiming that Russia is doing ‘everything in its power’ to keep the flows through Ukraine to the EU stable. However, the damage being done to Ukrainian energy infrastructure and its economy at large is still hard to estimate.
- Topic:
- Oil, European Union, Gas, Energy, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, and Ukraine
47. Reciprocal Pressures: Are Israel-Lebanon maritime border talks doomed to fail?
- Author:
- FARAS
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- Future for Advanced Research and Studies (FARAS)
- Abstract:
- The future of talks between Israel and Lebanon on delineating a shared maritime border, mediated by US Special Envoy and Coordinator for International Energy Affairs, Amos Hochstein remains uncertain following an exchange of escalatory statements from Israel and Lebanon’s Hezbollah about the disputed Karish natural gas field. Both sides suggested that the tensions can escalate into an all-out war unless their conditions are met. However, Lebanese officials including President Michel Aoun stated that the negotiations to demarcate the border are in the final stages.
- Topic:
- Oil, Treaties and Agreements, Maritime, and Energy
- Political Geography:
- Middle East, Israel, and Lebanon
48. Govt Agrees Financial Aid as Houthis Target Oil Sector – The Yemen Review, November 2022
- Author:
- Sana'a Center for Strategic Studies
- Publication Date:
- 12-2022
- Content Type:
- Commentary and Analysis
- Institution:
- Sana'a Center For Strategic Studies
- Abstract:
- Hopes faded that the expired truce would be revived in November, as Houthi authorities dug in their heels over maximalist demands that caused the talks’ collapse and then upped the ante with a series of drone and missile attacks on southern ports. The attacks crippled oil and gas revenues, though International Monetary Fund, Saudi, and Emirati support has given the government the lifeline it needs for now. Following the international financial agreements, the government-run Central Bank of Yemen in Aden moved to increase its oversight of banking data. Though there has been no return to full-scale war, intense if low-level clashes were seen in Taiz, Lahj, and Hudaydah. Reports persisted of back-channel Houthi-Saudi talks, but they appear to have stalled for now over Houthi demands for salary payments. The talks could become problematic for the government if they go beyond the question of the truce and extend to a unilateral settlement, which would be contrary to its interests. Divisions continued to wrack the Presidential Leadership Council, whose head Rashad al-Alimi was the sole member to spend significant time in Aden when he returned in early December after a regional tour that included Egypt, Jordan, and the UAE. The STC-Islah dispute, which has been at the heart of PLC wrangling, eased up slightly under UAE and Saudi pressure as their priority shifts to preventing a fiscal collapse after the Houthi strikes on oil facilities. This led to Alimi removing a key Islah military official in Hadramawt governorate, where STC-led protests were threatening to descend into violent clashes. The PLC’s Tareq Saleh strengthened his position as the scion of the Saleh family, leading government-backed celebrations to mark the death of former president Ali Abdullah Saleh in 2017. The opening of Al-Mokha airport raises the importance of his UAE-backed National Resistance forces, which guard a critical section of the Red Sea coast.
- Topic:
- Oil, Houthis, Armed Conflict, and Financial Aid
- Political Geography:
- Middle East, Yemen, and Gulf Nations
49. Oil or Nothing: Dealing with South Sudan’s Bleeding Finances
- Author:
- International Crisis Group
- Publication Date:
- 10-2021
- Content Type:
- Special Report
- Institution:
- International Crisis Group
- Abstract:
- Upon South Sudan’s independence in 2011, many hoped the country’s oil wealth would help build the state and lift citizens out of poverty. Instead, politicians have shunted these revenues toward patronage and personal enrichment, feeding internal conflict. Transparency and accountability are badly needed.
- Topic:
- Oil, Poverty, Natural Resources, Accountability, and Transparency
- Political Geography:
- Africa and South Sudan
50. An Analysis of the Effects of Oil Price Fluctuations on the Conduct of Monetary Policy in the Economic
- Publication Date:
- 03-2021
- Content Type:
- Working Paper
- Institution:
- The Nkafu Policy Institute
- Abstract:
- For many years, the economies of the Economic and Monetary Community of Central Africa, like most of the world’s economies, have been confronted with numerous fluctuations in the price of raw materials on international markets. For these predominantly extroverted economies, that is, those dependent on export earnings, these price variations have consequences for their macroeconomic performance and the conduct of economic policy. Like most economic crises in the world in the past, the pandemic caused by the new Coronavirus that has been raging since 2020 has also brought with it many changes. Between the confinement measures taken by public authorities to curb the spread of the virus and the resulting slowdown in global economic activity, there has been an inevitable significant drop in global oil demand. The direct consequence of such a scenario is the fall in oil prices on world markets, which is very bad news for the public finances of oil-exporting countries. The main objective of this report is to analyze the effects of oil price fluctuations on the conduct of monetary policy in the CEMAC. We start from the observation that oil shocks are the source of strong inflationary pressures in these economies. It is the responsibility of monetary policy to ensure price stability. Thus, after analyzing the effects of oil price fluctuations on the world economy as well as the macroeconomic and financial implications of these fluctuations on the economies in 2020, we use a Vector Auto Regressive model to analyze the contribution of oil price shocks on the historical dynamics of macroeconomic variables in the various CEMAC countries between 2001 and 2020. Then, we use a Panel Smooth Transition Regression model to analyze the impact of oil price changes on monetary policy in the CEMAC.
- Topic:
- Economics, International Political Economy, Oil, Natural Resources, Monetary Policy, Global Markets, Inflation, and Macroeconomics
- Political Geography:
- Africa, Cameroon, and Central Africa