Oil Diplomacy in the International Economy: Impact of Russia–Ukraine Conflict

Abstract

Russia's invasion of Ukraine has demonstrated how vulnerable energy markets are. Russia's invasion has made a tenacious situation much worse for energy markets, particularly in Europe. For now, the biggest question facing world leaders is how to sever their energy dependence on Russia. The United States and the United Kingdom were the first major countries to ban Russian oil, but neither depended heavily on these imports. Moreover, the impact of such actions is minimal because Russia can simply redirect that oil elsewhere on the global market. An embargo would only work if the EU took part, economists say, because it would be difficult for Russia to quickly find new customers for the oil and gas it sends to Europe. The late stages of the Industrial Revolution, which occurred in the early 20th century, saw oil rise to prominence as a commodity. As a result of the increasing importance of petroleum in modern warfare, petroleum politics have become a crucial factor in international relations. As a result, oil plays a crucial role in geopolitics, as countries compete to secure oil supply through trade, diplomacy, armed conquest, and other means. The changing situation of economic and political dominance in the world is now evident in the crisis. How much influence does Russia command in Europe and outside with its oil and other energy commodities? This study aims to review the relevance of oil in international politics and the various ways the current conflict between Russia and Ukraine is changing the narratives of oil diplomacy in the international economy. This study uses mercantilism, one of the four theories of international economic relations, to explain the situation that has witnessed the stability of Russia's economy despite strong waves of sanctions tossing it about. Evidence from reviewed literature shows that it is the global economy that carries the weight of the current crisis. It is, therefore, vital for policymakers worldwide to seek alternative means of survival if Russia decides to react by restricting its export of strategic global commodities of which it is a significant export leader, like oil.