The energy crisis causing havoc in Europe and threatening to radiate throughout the global economy is an emergency of western governments’ own making. Workers are now paying the price for politicians’ extraordinarily reckless approach to the war in Ukraine, facing soaring heating costs as the winter months approach amid an already-extreme wave of inflation.
Energy prices spiked an astonishing 30 percent on Monday when Russia announced that what had been a temporary pause in flows from the crucial Nord Stream 1 gas pipeline would be indefinite. The Russian government explained that it was no longer tenable to continue these exports as long as the European countries were determined to isolate Russia from the world economy with sanctions.
Europe is heavily dependent on Russian oil and gas – a fact that in past years had acted as a restraint on European governments’ aggressiveness towards Russia. About 40 percent of Europe’s natural gas comes from Russia. But with their embrace of the U.S.-orchestrated proxy war strategy in Ukraine, the European ruling classes threw caution to the wind in the hopes of eliminating one of their main foes.
The energy crisis exposes one of the basic lies told to workers about this proxy war. The politicians and elite pundits assured the public that Russia would be quickly brought to its knees by the sanctions, and this along with Ukrainian military resistance would force it to end the war. On both counts the populations of the western countries were supposed to be insulated from the fallout – Russians will experience the economic crisis, and Ukrainians would do the fighting and dying.
While the material impact on Russians – especially Russian workers – has been very real, the economic crisis is also playing out in the countries imposing the sanctions. France’s President Macron has called on citizens to carry out a “voluntary” 10 percent reduction in energy use, with rationing and blackouts a distinct possibility. Most major European countries have announced economic measures to prepare for the winter, including some that total tens of billions of dollars.
Workers in the United States will be affected too. While the U.S. economy is not dependent on Russian energy, the overall rise in global energy prices caused by war-related disruptions has been dramatic. An increase in energy prices affects the price to produce almost any major commodity, helping to fuel the inflation crisis. And because the global capitalist economy is so interconnected, if problems in Europe become bad enough to cause an all-out recession then this will have ripple effects in the United States.
In a clear sign that the global dominance of the traditional U.S. and European imperial powers is slipping, Russia has been able to find alternative markets in Asia, Africa and Latin America. Indian imports of Russian oil have skyrocketed since the war in Ukraine began, now standing at roughly 1 million barrels per day. Chinese imports of all Russian energy products have increased by $15 billion – a 75 percent jump.
Instead of a never-ending cycle of escalation – both on the economic front and on the battlefield – what is most needed right now are negotiations to end the war. To make that a reality, western governments would have to be willing to discuss issues they had previously refused to consider, like ending the expansion of the NATO military alliance up to Russia’s borders and a prohibition on using Ukraine’s territory as a staging group for advanced weapons. This would create the basis for lasting peace in the region, end the violence that people in Ukraine are suffering under, and provide much needed relief for the global economy.