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stratEGIC Monthly (February 2022): Russia’s Invasion of Ukraine—Implications for the Gulf

by Nikola Zukalová

For the most part, the Euro-Gulf space in February 2022, was defined by both direct and residual impacts of Russia’s invasion of Ukraine. The situation continues to send shockwaves across the world and has evoked painful, not-so-distant memories in Central and Eastern European countries, which had been violently suppressed by the Soviet Union, the predecessor of the Russian Federation. Signifying the gravity of the situation, the EU’s internal “East-West divide” was bridged, with all member states, the United Kingdom, the US, Canada, Japan and others coming together in a rare moment of concord on foreign affairs. This culminated in the introduction of severe sanctions with the aim of crippling the Russian economy to damage Russia’s war machine and those that support it. European reactions signalled a paradigm shift, particularly regarding economics, energy, security and defence, which will most likely shape its future actions also elsewhere, including in the Middle East and the Gulf. By resorting to an unnecessary war in Europe, Vladimir Putin forced some unprecedented developments in the European capitals—engaging the EU in acquiring and sending weapons to a non-member state, cracking down on Russian media agents that are used for propaganda purposes, freezing the assets of oligarchs and closing European air space to Russian aircraft. Germany, as a result, revamped its military and defence role for the first time since World War II, traditionally neutral Sweden and Finland are now seriously considering joining NATO and dispatching weapons to Ukraine, the financial safe haven Switzerland is, likewise, shedding its neutrality and has selected to impose sanctions on Russian assets, and more and more countries are allowing their citizens to fight in Ukraine. Once again, the EU is reacting to a crisis rather than adopting a more proactive strategy though this chapter of history may signal the end of European naiveté regarding revisionist regimes and their nefarious activities that seek to alter the international order and be the catalyst for a more robust, geopolitical EU.

 

Our first stratEGIC Monthly, a dispatch featuring three short analyses of the key issue(s) that defined the Euro-Gulf space in February 2022, focuses on:

 

  1. The invasion’s impact on the future of European energy security and the role of the Gulf countries;

  2. The GCC countries’ (lack of) reactions to the Russian invasion and their strategic meaning;

  3. The implications for the Iran nuclear talks in Vienna and the future of the Russia-China-Iran Axis.

 

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The European Energy Security Paradigm

 

Russia’s invasion of Ukraine has increased the urgency for developing a comprehensive energy strategy for Europe. Hydrocarbon prices are spiking amid concerns of energy disruptions due to Europe’s unwanted dependancy on energy imports from Russia, which, in 2019, was the dominant supplier of crude oil (27%), natural gas (41%) and solid fossil fuels (47%) to the EU. This dependancy cycle will impact Europe’s planned green energy transition and will most likely require a change in the long-term energy plans and some modifications of the Green Deal. Germany, the EU’s largest economy, will be particularly affected as its energy transition is largely dependent on Russian gas, which accounted for 67% of Germany’s natural gas supplies in 2020 thanks to the NordStream pipeline network and the commitment to use gas as a cleaner source of energy. The war in Ukraine has the potential to reshuffle future energy supply lines and intensify energy cooperation with alternative suppliers, including the Gulf, Africa, the Eastern Mediterranean, Central Asia, as well as encourage more R&D into alternative “greener” energy sources, such as hydrogen, while requiring infrastructural changes, including more LNG terminals, nuclear power stations and the East Med pipeline—all of which will deeply impact the geopolitical landscape.

 

Europe’s emphasis on renewables may continue to guide the EU, but in the short term, it may be forced to modify its stance on certain green policies. In the lead up to the energy crisis in the third quarter of 2021 caused by uncertainty over lower-than-expected Russian supplies, Qatar emerged as the EU’s largest LNG supplier (accounting for two-thirds of Italy’s LNG imports, more than half of Poland’s and a third of Croatia’s), followed by the US, Nigeria, Russia (Russian LNG formed the majority in Finland and Sweden and around a third in the Netherlands and France, and around a fifth in Belgium and Lithuania), Algeria and Trinidad and Tobago. Those other suppliers will become a first point of call — Italy, for example, discussed energy cooperation with Algeria immediately after the invasion. However, traditional gas exporters, including Qatar and Norway, could not fully replace the Russian volume due to capacity reasons and long-term contracts with Asian buyers. Doha, for example, announced it could temporarily divert around 15% of supplies to Europe. Similarly, regarding oil, French President Macron spoke to Saudi Arabia’s Crown Prince about the impact of the crisis on energy markets, with Riyadh affirming its commitment to the OPEC+ agreement, and on 2 March, Abu Dhabi agreed with Moscow to maintain energy market stability. The Russian invasion could be the wake up call the EU needed to stop voluntarily increasing their geopolitical vulnerability to Moscow — or any other single outside actor — and address its long-term energy needs responsibly by ensuring that no supplier has overwhelming dominance.

 

 

The Gulf Countries’ Perspectives on Russia’s Invasion of Ukraine

 

With the exception of Kuwait (for historic reasons) the other five members of the GCC (Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates) were more reserved, compared to the EU/NATO members, in relation to Russian belligerence against Ukraine. With acute economic, security and political considerations to weigh, the GCC countries have adopted a wait-and-see approach to what is perceived as an intra-European conflict. The GCC countries have been avoiding officially denouncing Moscow, cautiously balancing their interests so as not to alienate either side. That was until the 2 March United Nations General Assembly (UNGA) vote that denounced Russia’s invasion and called for a withdrawal of its troops from Ukraine, in which the six GCC countries joined 135 states to pass the non-binding resolution. Iran abstained alongside Algeria, Armenia, Iraq, China, Pakistan, Sudan and 28 countries, while a five-member camp, spearheaded by Russia, voted against, signalling their opposition to the current status quo.

 

Saudi Arabia, the UAE and Qatar (which has a 19% stake in Rosneft), because of their vast energy resources, were asked by European and American leaders assist in maintaining energy market stability. Kuwait — because of its experience of the Iraqi invasion (1990) — was the first GCC country (indeed, the first in the Middle East) to publicly address the situation and it called for respecting Ukraine’s sovereignty and independence but refrained from directly denouncing Russia. On 25 February, Kuwait joined 50 countries in endorsing the Moscow-vetoed UN Security Council (UNSC) resolution, which denounced Russian aggression on Ukraine and which formed the basis for the following UNGA vote. Qatar’s Foreign Minister called for dialogue and peaceful resolution of the conflict in phone calls with his Russian and Ukrainian counterparts, as did the United Arab Emirates (UAE) during the UNSC resolution vote, vetoed by Russia, in which Abu Dhabi abstained together with India and China.

 

The UAE’s abstention secured it Moscow’s non-veto in the UNSC vote to label the Houthis in Yemen as a terrorist organisation in its entirety the next day. Only a few days earlier, the Houthis supported Russia’s unilateral recognition of independence of Ukraine’s Luhansk and Donesk in the lead up to the invasion. Iran, which has long been in alliance with Moscow and Beijing, blamed ‘NATO's provocations’ for the ‘Ukraine crisis, as did Hezbollah a few days later. On 1 March, Saudi Arabia’s Cabinet addressed the crisis for the first time, expressing support for dialogue and deescalation efforts in Ukraine. And, on 2 March, the UAE announced a $5 million (USD) donation to humanitarian aid to people affected by the war. The global turbulence and Ukraine will also test the UAE’s presidency of the UNSC in March 2022.

 

Several factors may be influencing the GCC countries’ reluctance to explicitly denounce Russia, including:

 

1.      Interest of avoiding setting a precedent for interference in their affairs;

2.      The high level of investments and trade relations with and in Russia;

3.      Close cooperation with Moscow on energy via OPEC+ and the GECF;

4.      Persistent ambiguity of the EU/NATO members in relation to the GCC’s security concerns and external attacks;

5.      Russia’s role in regional affairs such as in Syria, Yemen and Libya;

6.      The fear that alienating Russia could strengthen its relationship to Iran.

 

While, officially, the GCC states continue to seek balance, most regional media outlets have not been shy to criticise Moscow’s invasion. At the same time, the GCC countries will likely offer quiet support to the EU/NATO to assure their partners of their commitment to the current rules-based order. The 2 March 2022 UN General Assembly resolution demonstrated that, ultimately, the GCC views the international status quo as favourable. As fighting escalates and pressure mounts, more GCC countries could calculate that remaining on the sidelines might be more costly and have implications for their security. Voting in a non-binding UNGA resolution may not be enough.

 

JCPOA: Implications for International Security

 

Recent revelations have shown that the Russia-Iran dyad in the JCPOA negotiations is ironclad. Moscow has been working hard to ensure that Iran’s interests are best served. This posture may be understood in two ways: as a reflection of Russia’s long-term nuclear development support to Iran and as best another arena for Moscow to enhance its global position. That Iran — and its many proxies — have endorsed Russia’s invasion of Ukraine barely raised an eyebrow considering the depth of their cooperation. However, their partnership has not yet been reflected in the direction that the Vienna talks have gone. Indeed, throughout February as the clouds of war gathered in Eastern Europe, JCPOA negotiations continued without significant advances. The war in, and for, Ukraine will also impact, in profound ways, the nuclear question, and with it, the JCPOA. Consider that, Russian President, Vladimir Putin, has been very assertive in his discourse around nuclear weapons. Now that the EU/NATO have begun to recognise the renewed danger of nuclear proliferation they may find themselves adhering to the same scepticism as the GCC states (and Israel) in relation to Iran’s nuclear ambitions. Dealing with Russia and deploying Cold War strategic awareness encapsulated by the concept of Mutually Assured Destruction (MAD) is possible. But would Iran be deterrable to the same level given that its theocratic ideology that calls for martyrdom? The EU/NATO may no longer be willing to wait-and-see. Also, now that nuclear power is being reconsidered as part of the new EU energy security strategy, the need for enhancing international checks is being revisited. Iran may find that all aspects of its nuclear programme will be placed under much more sever checks and hence may try to ‘breakout’ sooner that the JCPOA calls for. Finally, the JCPOA may be a yet-to-be-explored avenue through which the EU/NATO can punish both Russia (for its war against Ukraine, threats against Sweden and Finland and elevating of Russia’s nuclear warning system) and Iran (for its support to outlawed terrorist groups such as Hamas, Hezbollah and the Houthis). If the EU now turns it back away from the JCPOA and authorises additional sanctions against Tehran, the EU would do more than dash Iran’s hopes of an economic recovery—they would humiliate Russia by illustrating the limits of its power.

3 March 2022