At the same time, Russia has invaded Ukraine and is strategically cutting off energy supply to its client states in Western Europe. This includes members of the North Atlantic Treaty Organization (NATO). With our faltering diplomatic relationships, reliance on foreign oil now constitutes a much greater security dilemma.

Energy diplomacy has always been a staple of Russian and Saudi economic strategy. However the timing of the cuts from OPEC+ has led the U.S. to accuse Saudi Arabia of supporting Russian aggression.

A docked oil tanker. Courtesy of Tom Fisk, Pexels

Russia is a tertiary member of OPEC and a large oil exporter.  It is unlikely that other OPEC members would risk the ire of their Western clients to clandestinely support them.

OPEC is most likely ensuring they reach their financial obligations by lowering supply amid increasing demand. This would increase state revenues on petrol-based products as a buffer against the economic impact of Covid-19.

Petroleum-rich Russia just happens to benefit as well.

Whether lowering crude oil production rates and driving up costs was purposeful or the result of OPEC self-preservation is inconsequential. It still serves as a strategic challenge to the US and its allies in their defensive strategy for Ukraine.

The global community condemned Russia’s aggression via financial sanctions. This crippled Putin’s ability to scale Russian aggressive tactics. This allowed other countries to make a stance without having to risk the major losses of tactical intervention.

But by lowering production rates, OPEC effectively diminished the impact of those sanctions. In turn, pushing the financial burden back onto us through our complete economic reliance on foreign oil imports.

As of now the U.S. has lifted some sanctions on petroleum-rich Venezuela in order to balance out import levels with local demand rates.

This is only a temporary fix.

A burning tower at an oil refinery, courtesy of Nur Andiravsanjani Gusma, Pexels

Venezuela was one of the founding members of OPEC and while they may not have reserves at the scale of Saudi Arabia, they can still conspire to increase prices and decrease supply.

What happens when their oil prices become too burdensome? Will the US lift more sanctions? What happens when negotiations falter?

This situation can only get worse for our country’s economic and diplomatic outlook.

With our own oil reserves severely limited, it would be more practical in the long term to completely eliminate our reliance on fossil fuels.  The United States government should appropriate funds for renewable energy research and prioritize development of green energy technology.

Windmills on the water, courtesy of Pixabay, Pexels

The complete elimination of fossil fuels would require a thorough redesign of our national infrastructure, as well as advances in the solar, wind, and hydroelectric sectors at a far greater scale. If we want to ensure we are fully emancipated from foreign fuel, we need to invest in these as soon as possible.

The funds could also be used to establish diplomatic partnerships in developing nations to build green infrastructures abroad. By owning the patents on all the new technology, we would stand to gain the most from these new developments.

Not only would the research revolutionize the global economy, but it would also significantly lower demand for remaining fuel reserves. This would drive down costs to import fuel so we can update our own infrastructure sustainably over time. It would also diminish the reach of oil exporting countries.

It may take many years but compared to the increased security risk posed by OPEC, green energy infrastructure is a worthwhile investment in our future.

This article was written by the A.G. Sanning Team. To learn more about our take on current events or read about the team visit the Global Perspectives Blog.

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The world is changing at an unprecedented rate. With the growing rates of globalization and conflict, there have been an increasing number of turbulent political, social and economic developments, transforming both the foreign and domestic business markets. 

• Last year, the capitol was shaken by a terrorist-backed coup intended to overthrow our legislative body. This has significantly damaged the already declining reputation of the U.S. in international markets and changed our image from that of a world leader to one of political and financial instability.

• A few weeks ago, a landmark civil rights case was overturned in a Supreme Court more blatantly partisan than any before it, jeopardizing both privacy and human rights protections for large portions of the population. This decision will impact compliance policies for organizations and severely complicate human resource processes.

• This week, an internationally recognized political leader was assassinated in broad daylight in a country where gun ownership is more heavily regulated than almost anywhere else in the world.

• Meanwhile, the ongoing conflict in Ukraine has led to shortages of both Russian gas and Ukrainian wheat on the world market, threatening both the political and economic stability of nations who rely on these resources. The severely limited food supply has led to high inflation, supply chain and logistics issues for the organizations that operate within the region. 

These issues, and many more, challenge the safety and prosperity of Americans and American companies both overseas and here at home. A clear understanding of the political picture overseas is more vital than ever before to those who live, work, and/or have interests abroad.

Though you cannot control what will happen, when it will happen, or how global leaders and their policies will respond, an understanding of geopolitical risk is essential in order to safeguard your assets, investments and projects. 

A.G. Sanning is a boutique risk consultancy whose mission is to keep small to medium enterprises and nonprofits agile in these times of political and economic uncertainty. We provide comprehensive geopolitical risk analysis and due diligence services to protect and inform you about changes in the world and the impact these might have on your organizations and their interests.

Our firm’s work is intended to support decision-makers by proactively identifying and implementing measures to protect your investments, no matter the size of your portfolio. Our risk analysis and due diligence platform identifies, quantifies, and advises on ways in which to take advantage of opportunities and mitigate threats which may accompany various political, diplomatic, or economic outcomes. 

We offer:

• review of changes in legislation and foreign policy initiatives
• assessment of the popular mood and its repercussions
• evaluation of economic performance following a political development, 
• strategizing for global nonprofits, think tanks and international projects.

Most of our free data and research publications can be found in the Briefing Room, along with various white papers and reference materials. But this blog serves a slightly different purpose. Global Perspectives is designed as a forum for discussion of the various facets of global developments. It is intended to help readers gain a well-rounded understanding of a given situation in context and to propose ways in which to safeguard your investments.

We do this by providing editorial comment, interviews, and think pieces from various points of view. The content will be held to the same standards that characterize our risk analyses. Where necessary, we will provide reference materials relevant to the situations being discussed. 

At A.G. Sanning, we are committed to providing our clients with unbiased and reliably accurate information. In keeping with that commitment, we intend for this blog to cover intense, sometimes controversial topics with an analytical eye, in order to provide our readers with a more thorough understanding of them. To ensure consistency and establish a neutral baseline for discussions, this blog begins with a balanced focus on diversity, equity, inclusion and human rights law, then expands into other points of view. 

The blog will feature: 

• Editorials from the A.G. Sanning team
• Interviews to provide more global perspectives
• A listing of upcoming events
• Opinion pieces from special contributors
• Theory and application
• Travel logs and updates
• Political book reviews
• Questions and answers

We hope this blog will help empower business leaders to stay informed and make better decisions for their organizations and the rest of the world. 

To get started, click any of the links above, or Contact Us to learn how we can help protect your business today.

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