Writing for the Wall Street Journal this year, David Knight Legg, a renowned energy expert and adviser to investment and political-risk firms, claimed there were “four reasons to think this war is, or will default to, an energy heist”.
“Putin is taking full control of Ukraine’s vast, extremely valuable energy assets and intends to integrate them into the Russian supply chain on which Europe now depends,” he wrote, adding that taking over Ukraine’s energy would hand Putin the second biggest natural gas reserves in Europe, worth more than $1 trillion, as well as oil supplies worth more than $400 billion.
It would give Russia “an extraordinary strategic geopolitical advantage with ports on the Black Sea and Sea of Azov, putting Russia at the centre of global energy supply to the vast European and Asian markets for the foreseeable future”.
He also argued that Russia’s initial focus on the Donbas, Luhansk and Donetsk regions as well as the Black Sea and Mariupol were areas that contained most of Ukraine’s energy resources, and pointed out that Mariupol was an “essential land bridge to his Crimean assets and the critical port from which to ship resources from Donetsk and Luhansk”.
Finally, he said the 2014 annexation of Crimea gave Putin Sevastopol and Ukraine’s Black Sea assets worth hundreds of billions, which was passed to energy giant Gazprom and “declared an exclusive economic zone in the Black Sea, defended by the Russian navy”.
A similar argument was published by the New York Times, with Bret Stephens previously writing that Putin is “less interested in reuniting the Russian-speaking world than he is in securing Russia’s energy dominance”, and that “Russia’s new energy riches could eventually help it shake loose the grip of sanctions”.
And it’s a hypothesis that does make sense, given that the European Union relies on Russian oil and gas for one-fifth of its entire energy needs, while Russia relies on EU cash for one-third of its entire budget, which influential American YouTuber Joseph Pisenti, better known online as RealLifeLore, describes as Russia’s “simultaneous greatest strength and greatest weakness”.
Russia hasn’t delivered gas to Europe via the Nord Stream 1 line since August, while Nord Stream 2 was paused after the invasion, leading to soaring gas prices and accusations Russia was using gas as a weapon against the West and its support of Ukraine.
Australian National University Associate Professor Matthew Sussex said he agreed that Vladimir Putin was almost certainly motivated by Ukraine’s attractive resources.
“Putin for a long time has wanted to have this sort of Eurasian economic union as a counterweight to the EU, and he’s basically fomented a proxy civil war in the east of Ukraine over the past eight years,” he explained.
He added the fact that the Donbas region was “pretty heavily industrialised” coupled with Ukriane’s huge grain exports were “definitely motivators” in the invasion.
“There’s also the fact that if he can take the territory that is Ukrainian that has access to the sea, then it means that Ukraine is basically landlocked and can’t send grain via the Black Sea to its African clients,” he said.
Sussex also pointed out that Russia had used cruise missiles against people in pro-Russian areas, indicating the military operation was less about “liberating” the population as claimed by the Kremlin, and more strategic.
However, he said it was doubtful Putin could hold onto the Donbas region given the “terrible” failure of the Russian military so far.
“They’re not even holding onto all that territory – Ukraine is pushing them out in some places,” he said.
“It has become a much more personal matter now, affecting Putin’s credibility – if you invade a country with 180,000 troops and are expected to win in three days … it becomes a matter of political survival.”
He said while he did not believe Russia would win, if the invaders were to somehow eventually defeat Ukraine, the nation would become a “failed state” which would have major impacts on Europe’s security, Russia’s control of the Black Sea and could also have a knock-on effect in the Middle East.
Russia ‘has miscalculated’
The gas crisis came hot on the heels of global fossil fuel shortages after the Covid pandemic and supply chain problems, but Professor Yuan Chen from the University of Sydney’s School of Chemical and Biomolecular Engineering said he disagreed with the argument that the invasion purely boiled down to an energy grab.
“If we look at oil and gas production worldwide, there’s enough for everyone – the total amount of gas and oil from the US, the Middle East, Russia and others combined together is more than enough to supply the world,” he said.
Instead, Chen argued that the current oil and gas crisis came down to a logistics and supply chain issue instead of a lack of resources.
“Oil might just be a card that Russia is playing to demand something,” he said.
“But EU countries are enduring a bit of suffering due to higher prices because they are standing up to Russia in this situation, so Russia has miscalculated quite a lot.
“Fundamentally it is not a supply or demand issue, it’s just a political issue, plus all parties are trying to gain more from the situation.”
Chen also previously argued that the rise in renewables was set to improve energy security and could undercut the old energy powers.
“The current oil and gas supply chain issues and increased electricity prices in Europe are a short-term problem. Europe’s winter is almost over and with it, its seasonal energy needs,” he said this year.
“If the current issues continue, there is plenty of liquefied natural gas produced in the US and the Middle East that can be shipped to Europe – but at a higher cost than those imported from Russia.”
Meanwhile, Krystyna Marcinek, an assistant policy researcher at the non-profit, nonpartisan Rand Corporation, wrote this year that while Ukraine control’s Europe’s second-largest reserves of natural gas, it amounts to less than 3 per cent of Russia’s gas reserves, meaning the cost of the war far outweighed any benefits.
