By Supriya Shekhar
After a series of diplomatic disagreements, the Russian-Ukraine conflict has escalated, gathering concern from nations across the globe. Not only does this crisis undermine and make us question renewed international diplomacy but also worldwide efforts against proliferation of weapons of mass destruction. Apart from the fact that Ukraine’s faith hangs in balance, this dispute will also likely disrupt global supply chains, international expenditure on military and European security. Interestingly enough the Middle Eastern region is likely to expect some significant transformation as a result of this dramatic geopolitical upheaval.
The Middle Eastern region will witness prominent effects on its energy supplies, food insecurity, refugee management and achieve a hopeful leverage over the West. Currently Russia is the world’s leading natural gas supplier and ties with Saudi Arabia as the highest oil producer. As Russia invades Ukraine, Europe finds itself at odds with its biggest energy supplier, causing more stress on its energy crisis. No matter how desirable, the MENA region cannot single handedly replace Russia’s energy role, however it could draw some Western and European leverage. The western sanctions are largely focused on banking, export of technology and common commodities and freezing Russian assets. One can notice that these sanctions are missing a very integral part of Moscow’s income; energy trade. Seeing how intertwined global economies are now, as alarming as a fuel embargo will be for the Russian economy, it will be even more distressing for European nations, where from the biggest firms to common households are dependent on Russian given energy. Qatar’s emir, Sheikh Tamim bin Hamad Al Thani, and Biden on a call on 31st Jan, considered how in case of an invasion, Qatar can fulfill Europe’s short term gas needs by diverting cargoes from Asia to Europe. Qatar has already been planning to expand its Liquified Natural Gas(LNG) projects, and this could be a fruitful opportunity for them to not only improve their image but also attract a few long term European buyers. According to the International Energy Agency, Saudi Arabia, Iraq, and Kuwait have an oil surplus of 4 million barrels per day and could be an alternative for Russia in a situation of crunch.
By agreeing to be a part of this solution these MENA nations can increase their own market share, gather international goodwill and future lucrative contracts.
Western, European and Middle Eastern geopolitics has seen a turn of events. Turkey is a NATO member having ties with both Ukraine and Russia, it’s president Recep Tayyip Erdogan, who has been previously shunned by the European and Biden administration can now gain a predominant position in this conflict. Turkey is under a spotlight due to this conflict, therefore can well anticipate a renewed and favorable foreign policy, and a considerable edge in its western negotiations. Simultaneously as tensions increase, European position in Syria and Libya worsen and if the West continues to agitate Russia, Europe is fearful that Russia might retaliate through its position in Libya. Likewise, the Iran nuclear agreement where Russia was an intermediary between the Western and Iranian agents can fall apart if Western-Russian dispute continues to widen.
The Middle East especially is heavily relied on grain and many agricultural exports across the Black Sea. Egypt, Lebanon, Syria and other such basin countries have more or less 50% of their grain exports coming through Ukraine and inaccessibility of the Black Sea is expected to cause a sharp increase in food grain prices, aggregating food insecurity in an already nutritionally deprived region. War will disrupt port activity and logistics affecting the mobility of Ukraine’s agricultural products and stranding its dependent trading nations. To avoid a potential food crisis, countries such as Turkey have shown willingness to mediate and diffuse tensions, and for the same reason a lot of vulnerable states are persuading the Kremlin to resile. Ukrainian wheat is an essential import for 14 nations, of which half are already suffering through severe starvation. Nations such as Yemen, already on the face of famine, could also be witnessing civil turmoil due to rising bread prices after already taking a hit due to the pandemic. Moreover Russia is the world’s biggest exporter of all three types of fertilizers, and sanctions or any cuts in its supply will surge the already high nutrient prices, affecting crop yields and adding on to the current inflation in the food industry.
An expected outcome of this conflict would be sanctions on the metal trade conducted by Russia. As witnessed before, when the West first sanctioned the Russian United Co. Rusal, there was unrest within the entire aluminum market. Analysts are predicting all time high aluminum, steel, zinc and nickel prices throughout Europe, disrupting flow of funds and exports. The palladium market will have to bear the most frantic consequences as Russia accounts for 40% of its global supply. At a time where manufacturers and developers already face difficulty in procuring metals from aluminum to zinc , even minor sanctions on Russian trade can be turbulent for the market in the long term. Another small yet vital issue is that a humanitarian crisis is likely to arise. Organizations such as the United Nations and Unicef already have a burdensome backlog with desperate areas to provide for and MENA regions already face refugee struggles, thus this conflict will only be a strain to the system denying helpless regions the assistance they so require.
As expected, the Middle East is straddling the fence on this issue. The region has spent considerable years mending their relations with the West and simultaneously keeping Russia at bay. In a situation like this, where both sides expect explicit support, the region must very carefully place its cards to not jeopardize its future while ensuring stability and security in the present times. If the Middle East comes through for the West by providing fuel, the coming decade can be very promising for this region, however it is anticipated that the Middle East will not actively provide military support, easing Russia too. In this situation it is justified that each nation is looking out for its future stability and security, however precaution is better than cure and global efforts must be put into de-escalating the conflict altogether and removing the threat of a potentially disastrous war. Nonetheless it is thought provoking to foresee how struggling nations are always most unfairly affected by such global disruptions.
“The views expressed in this article are the author’s own and may not reflect the opinions of The St Andrews Economist.”