Saturday, February 24, 2024

Ukraine War 2, Two years of war and oil prices

Today is two years of the Russia invasion of Ukraine. US, EU, NATO imposed various economic and military sanctions. Like price cap $60/barrel on Russia (Urals) oil. Initially it was followed by some importing countries but abandoned in a few weeks. Today WTI crude is $76.5/barrel ,Urals crude $76.2/barrel, almost zero price difference between the two. Start of price cap, difference between them  was up to $20/barrel, now zero. 

EU sanction is a failure, Putin is richer, have more funds to sustain the war. While Germany, UK etc have high inflation and negative or crawling growth in 2023.

The so-called "axis of evil" Russia, Iran, China, happen to be among the biggest producers, biggest reserves, of oil-gas, and CN is the biggest manufacturing base. Their capacity to supply the world with oil, gas and manufactured goods means many countries would not want to antagonize them.

This is not just a military conflict but also of an energy and economic conflict. The old dominant powers vs the emerging powers.

Us small countries should stay neutral as much as possible. We prioritize our economy and jobs, not the military political interests of both sides.

If we read or see some groups, academics, think tanks, etc. pushing for soft or hard support for the US, NATO position, very likely they are on the payroll of the US. Conversely if pushing for soft or hard support for CN or RU, very likely they are on the payroll of CN or RU.

Very easy to be swayed to either side then overlook our own interest as a nation -- jobs, economic and energy security. Taiwan, they should negotiate with China or face heavy and very expensive military preparations. Why should we be taking side in that boiling military and political situation? 

The main lesson of Ukraine two years war of endless destruction and deaths on both sides -- early negotiation is still the best option, stay away from using  missiles and tanks. Hardline position on either or both sides leads to hard losses in lives and properties.

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