How We Averted The Polycrisis
Good thing India didn’t join the sanctions, explains Andrew Korybko.
Maybe there’s a lesson in there for more people and countries.
Also, maybe it’s too late for some.
Even if the deindustralization of Germany has barely started.
Authored by Andrew Korybko via The Automatic Earth blog,
A representative of India’s Petroleum and Natural Gas Ministry told a department-related parliamentary standing committee that their country’s Russian oil imports helped stabilize the global energy market and prevent havoc from breaking out according to a recent report from The Indian Express. What follows are the excerpts that they cited from that event, which will then be analyzed so that the reader can fully appreciate India’s latest contribution to the world:
“If they (Indian refiners) had not imported Russian oil into India, which may be a big number of 1.95 million barrels per day, that deficiency would have created a havoc in the crude oil market and the prices would have shot up by about $30-40.
The crude oil market is such that in the market of 100 million barrels per day, if the OPEC (Organization of Petroleum Exporting Countries) says that they are going to reduce it by one or two million barrels per day, prices increase by 10 to 20 per cent and reach up to $125-130.
If India does not absorb–I would call it absorption–1.95 million barrels per day, these prices would have reached $120-130. It would have created a havoc. Diplomatically, we are a sovereign country and could say that we have been doing what is good for the country as well as the world.”
This insight aligns with what was earlier shared in these five analyses from June 2022-March 2023:
* 14 June 2022: “Russian-Indian Energy Diplomacy Helps Delhi Balance Washington”
* 30 November 2022: “Russia’s Energy Geopolitics With China & India”
* 16 January 2023: “The US Discredited Its Own Sanctions By Buying Refined Russian Oil Products Via India”
* 8 February 2023: “The West’s Anti-Russian Sanctions Made India Indispensable To The Global Energy Market”
* 1 March 2023: “Russia Will Keep Up The Pace Of Oil Exports To India Despite Increased Chinese Demand”
If India hadn’t resisted Western pressure, then the whole international community would have suffered.
To explain, many Global South states were already struggling to deal with COVID-connected debt problems prior to the West’s anti-Russian sanctions worsening their food insecurity, so an energy price crisis on top of that could have pushed them over the edge into an uncontrollable polycrisis. Not only could this have led to spiraling unrest that could have spread throughout this swath of the world, but the security and humanitarian consequences would have also destabilized the West as well.
Those countries among that New Cold War bloc that are dependent on resources and markets there might have felt compelled to launch unilateral military interventions, while large-scale refugee flows could have crashed into their societies with all that entails for exacerbating preexisting tensions. This worst-case scenario was averted through India’s principled neutrality towards the Ukrainian Conflict, which saw this globally significant Great Power resist Western pressure to boycott Russian energy.
If Delhi had capitulated to their demands, then the abrupt removal of so much energy from the market would have plunged it into chaos. The remaining producers couldn’t have replaced Russia’s lost share, thus leading to a competition among the wealthiest countries (namely China and the EU) to purchase their remaining resources. All the while, the debt-beleaguered and newly food-insecure Global South would have been unable to maintain its minimum energy needs, thus setting the polycrisis into motion.
As the unnamed Indian official told parliament, “we have been doing what is good for the country as well as the world”, which highlighted the growing convergence between India’s national interests and those of the international community. This South Asian Great Power practices what can be described as a hyper-realist grand strategy wherein India not only prioritizes its national interests as policymakers conceive them to be, but candidly acknowledges this approach and also details those same interests.
By doing so, India removes all ambiguity about its interests, which therefore makes it the most predictable partner that anyone can have. This policy is premised on the trust that India has cultivated with everyone since they don’t have any reason to question its representatives’ sincerity whenever they speak about their national interests. Some might have different views and even dislike India’s policies, but nobody can credibly claim that those representatives are lying about what that they want and why.
Russian Foreign Minister Lavrov praised this approach and the multi–alignment that it naturally led to during a press conference with his Indian counterpart on Wednesday when saying that:
“I believe this policy is not just important for Russia and all other countries around the world, but it is the only policy worth conducting that will ensure respect and reputation and be beneficial in India’s cooperation with other countries that show similar respect to all members of the international community.”
The West will never appreciate what India did for the world, but the Global South is beginning to realize that the polycrisis that many of their officials feared would unfold shortly after the anti-Russian sanctions were promulgated was largely averted through India’s drastically scaled imports of that country’s oil. This stabilized the market, which made it easier for them to manage their debt and food security problems, thus preventing this part of the world from slipping into full-scale instability to everyone’s detriment.
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