Independent Online

Thursday, July 7, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

The Russia-Ukraine conflict and the ever growing energy crisis

Bheki Gila. Photo: Supplied

Bheki Gila. Photo: Supplied

Published Jun 14, 2022

Share

By Ambassador Bheki Gila

The flames of war in Ukraine are fanning out with perplexing ferocity. Adding to it the incendiary politics of oil and gas and their inscrutable economic machinations, they are burning with an intensity that is threatening the sensitive sinews of the global ecosystem and the febrile economy on which they depend.

Story continues below Advertisement

Every so often, we stop to enquire on the difficult questions that are churned out by a raging war that has no end in sight. Who started the war?

Whether out of frustration or of partisan curiosity, there is all round admission that the state of the global economy and the relations among nations, have both been frayed by this internecine conflict with many layers.

Not to stray too far from the question of who started the war, depending on the enquirer and the immediate audience, the Peloponnesian War has interesting pointers. These are deception and doublespeak by war mongering politicians.

According to the Thucydidean hypothesis, these two will always and unfailingly deliver us a savage war at a horrifying human and economic cost.

In the legendary tales of our folklore, it was an uncontested fact that the King and his coterie lorded over the realm only at daytime. At dusk, however, the witches or whomsoever among them was mightier, reigned supreme. This accord among the dwellers provided the fundamental tenet of social justice for the arbitration of disputes.

The causes of disputes among the commoners were always easily determinable and so the solutions were decidedly plentiful. However, when a new witch emerged, a vicious war would ensue. It would be long drawn for sure and its justification would always be changing into different colourful hues, sustained by propaganda wars that demand total allegiance to one side or the other. At that point, the question as to who started the war becomes existentially irrelevant.

Story continues below Advertisement

Consistent with the slick and hiss of this double headed monster, the prices of oil and gas continue to ebb and flow in kind response. As the war protracts and the battle tactics become insanely grotesque, the upward curve of both the crude oil and gas pricing is destined to rise.

Perhaps the estimation of so many observers has come to bear, confirming in very specific ways that this European War, is a war on energy. Or rather, fuelled by it. And if this latest round of punitive sanctions is any measure to go by, energy wars are the most vicious.

Having tasted the forbidden macabre power of unilateral sanctions, Europe may be preparing to open another war front. There is a groundswell of disturbing noises that if Russia is not cowered by the panoply of punitive measures, including the proscription of future imports of hydrocarbons, they will impose sanctions where they must and declare war against anyone who imports from Russia for any or no reason at all. The threats of sanctions are for India and the waging of war will be against China.

Story continues below Advertisement

Janet Yellen the US Treasury Secretary, has let it be known that they are forming an ‘OPEC’ of Russian Oil Buying Countries, a very specific category of nations. If this approach is implemented, it imagines a lot of assumptions. That’s not unexpected. Belligerent nations driven by jingoist impulses of superiority tend to indulge copiously on assumption making.

However, Europe’s gleeful announcement of the sixth round of sanctions, which to a large degree were targeting Russian oil exports to Europe, did not match its unity of purpose exactly. And their spinmeister machinery went on overdrive. Their talking heads agreed to sanction oil, but not immediately.

The commitment to expedite the punitive measures was emphasised except for those countries that are landlocked. Whatever had to be agreed, it should not affect Hungary. And if it should exempt this errant member that is the only one sanctioned by its own brethren for one thing or the other, then the exception ought to be extended to anyone else who receives oil from Russia through the Druzhba pipeline.

Story continues below Advertisement

The deliberations were remarkably successful, we were assured. But in truth, were they? It requires a significant amount of glib and political sophistry to craft out of that level of complex result, a title of remarkable success.

As the story of natural gas gets more politically inflamed, it has dragged the lesser known nobler gases, specifically the neon gas. Considering the utility of this gas and its centrality in the war calculus, the global reach of this crisis takes a turn for the worst. The pre-eminence of this gas is told through the prism of microchips and semi conductors. They are central to the production of every smart product which sustains humanity’s modern proclivities.

From mobile phones to cars to televisions to computers to defence equipment, and planes and game consoles and many more other appliances, our dependence on microchips is bewildering. To be manufactured, they require precision lasers that are fired by neon gas of compatible grade.

Fifty percent of this gas is manufactured by two companies in Ukraine with Ingas based in Mariupol and Cryoin operating out of Odessa. Both of them have ceased operations completely. The only other large producer of up to 30 percent of world production is in Russia. The authorities in Moscow have announced recently that they will restrict the sale of this gas, including its other noble siblings, Xenon and Krypton. In 2014 when the crisis in Crimea erupted, the neon gas prices increased by more than 600 percent per litre. Where the prices are headed now is anyone’s conjecture.

In these Orwellian times when the most violent nations are said to be the defenders of democracy, whatever that means, and the constant barrage of lies always issue from the Ministry of Truth, it is not impossible that the factors that drive prices of energy commodities may never be truly know. And if known, they will not be sufficiently protected from the vulnerabilities of deliberate manipulation.

Trapped in a war of the witches-like suspended reality, the certainty of prices at the pump, especially at pre-war levels, will continue to elude us. And with enough doublespeak, none will be the wiser.

Ambassador Bheki Gila is a Barrister-at-Law.

BUSINESS REPORT

Share