Russia’s Future as an Energy Power
Russia’s invasion of Ukraine has far-reaching consequences for the global energy system and for Russia itself. Sanctions and fewer Russian natural gas deliveries to Europe have disturbed the balance between supply and demand in the fossil energy market. Whereas Europe has alternatives to Russian energy, these developments are threatening Russia’s status as a global commodities power, argues Jeronim Perović in this CSS Analysis.
Hardly any other country in the world has such a wealth of strategically important commodities as Russia. It is one of the most important producers and exporters of oil, natural gas, and coal. In addition, Russia supplies global markets with various other high-demand goods such as wheat, iron goods, metals, nitrogen fertilizers, and wood products. However, fossil fuels and other fuels are by far Russia’s most important trade goods, constituting roughly 50 per cent of the country’s overall export income. Since the Russian state earns approximately a third of its income via taxes from the oil and natural gas export business, the commodities sector is what is helping to finance Russia’s war against Ukraine.