‘It is going to be far more difficult for Europe to wean itself off Russian oil and gas than expected’

May 2022

Our latest Critical Conversation podcast features an exclusive discussion with Sir Tony Brenton (former British Ambassador to Russia), on the potential trajectory of the war in Ukraine, the role of oil and gas in Russia’s political system and the fast-moving global geopolitics of oil and gas in light of the conflict.

Sir Tony Brenton is the former British Ambassador to Russia. A senior diplomat at the British Foreign and Commonwealth Office for more than 30 years, Sir Tony handled European matters in London and in Brussels in the 1980s, working on energy issues and the birth of European environmental policy. He spent much of the 1990s in Moscow, dealing with economic reform, and between 2004 and 2008 was posted to Moscow as Ambassador, managing Britain’s turbulent relations with Russia during that period. Sir Tony has co-written a book on Russian history and remains a close follower of Russian politics and affairs.

In this 30-minute conversation, recorded on 30 May 2022, Sir Tony shares his thoughts on the current state of play in the Russia-Ukraine conflict, the political and economic challenges Europe faces as it tries to wean itself off Russian oil and gas and how this dynamic may impact the geopolitics of energy supply in the coming years.

The discussion was moderated by Daniel Litvin, Founder and Senior Partner of Critical Resource.

Please note, as with our other podcast interviewees, the views expressed by Sir Tony do not necessarily reflect the views either of Critical Resource or ERM.

Among the key points raised by Sir Tony:

Russia is, and always has been, a sort of Sparta – a country which is run by people far more concerned about national security and greatness than about the economic state of the population. Throughout history, the Russian people have instinctively rallied around the state in the face of international pressure and opposition. The war in Ukraine and resulting sanctions have reinforced Putin’s popularity and hold over the country in that respect.
As it stands, the conflict looks like it is about to become bogged down. Russia has seemingly lowered its war aims from a complete takeover of Ukraine to simply reclaiming the whole of the Donbass area, but even that is a significant target and one which may prove difficult to achieve with continued Western military and financial support to Ukraine. At some point, battle lines may stabilize and hopefully force both sides toward peace talks.
The West wasn’t wrong to be originally optimistic about the future of Russia and the prospects for its oil and gas industry in the immediate post-Soviet period. However, the gradual divorce on security arrangements and NATO expansion in Europe has proven to be the downfall for relations and the business environment more generally. In that regard, the West may have played its hand too assertively on security issues with Russia following the end of Communism, to the detriment of a more functional relationship.
The war in Ukraine and western-led sanctions against Russia will accentuate a trend that has been developing for several years – and push Russia closer to China. Political linkages and energy supply arrangements between Russia and China will grow stronger and more numerous in the coming years. Both Russia and China see the West as the greatest threat to their overall systems of governance.
We are seeing an engineered shift of Russia’s attention and resources away from Europe and towards the Far East as a result of the conflict. It is going to take far more time and resources for Europe to wean itself off Russian oil and gas than expected and in the meantime, Russia will actively seek alternative markets to sell into and limit its exposure to a western-led boycott.
The shifting geopolitics of energy security will no doubt have an impact on Russia’s climate ambitions and the future of global climate policy more broadly. As a significant emitter and major hydrocarbon exporter, Russia will view future climate negotiations as another set of instruments that they can deploy in tough negotiations with the West should it come to it.