I’m throwing this out there because I’m essentially out of gas for the week, about to post something nasty on the utter lawless chaos in New Orleans which will really finish me off – being depressed is a pretty good antidote to political writing, and watching NOLA collapse is depressing – and we don’t have a lot of stuff for the site today. So I’m drafting Zeihan to help.
He’s an interesting guy. Zeihan is a geopolitical analyst, which essentially means he writes articles and books and makes videos talking about what the world is going to look like in 10 or 20 years. I can’t really say he’s right about everything he says, or even whether he’s right about much of it. But I can say the facts he offers are, indeed, facts.
And in this, he does have a significant point when he talks about the problems Russia is going to have in sustaining their oil export infrastructure as the West pulls away over the Ukraine war.
You look at Russia and the fact they’re a country with a lot of talented, smart people and vast natural resources and you wonder how they could be such an economic basket case, and the answer is really pretty simple – Russia might be big, but its geography stinks.
Compare them to the U.S. and it gets pretty clear pretty quickly.
Our geography is far and away the best in the world. We have major navigable river systems servicing essentially every region of the country other than the far southwest, and our coastlines are covered with well-situated deepwater, warmwater ports offering free access to international waters.
Russia has none of that. Most of the big rivers in Russia – virtually all of them from the Urals west – flow north into the Arctic Ocean, which makes them useless as transportation infrastructure. Russia’s northwest has a couple of ports with access to the Baltic Sea, but those ice in all the time. And the Black Sea ports are all hemmed in by the Bosporus, meaning Russia has to come through Turkish waters to get anything into the Mediterranean.
Even their Pacific coast is relatively far north, meaning they don’t really have a good warmwater deepwater port there – and Vladivostok, the one port of any size on the Russian Pacific coast, is so far away from the population and manufacturing centers in that country that’s barely of any use.
Russia’s geography stinks, and that’s a big economic inhibitor for them. Their economy mostly consists of agriculture and mineral extraction, and they export food, food inputs (i.e., fertilizer) and oil and gas – mostly to Europe, but also to China – through what transportation infrastructure they do have, a lot of which is rail and, in the case of oil and gas, pipelines.
The best port (or at least one of the best ports) in the old Soviet Empire was Odessa, which is in Ukraine now. And capturing Odessa was a big strategic war aim for Vladimir Putin when he launched that war a year ago.
Zeihan notes that the big effect of the Ukraine War could be the shutting in of a big chunk of Russian oil production. Because the West has sanctioned the hell out of Russian oil, imposing a price cap on the Russians which makes it difficult for them to pull a profit out of selling to Europe, and companies like Eni and Total SA and others who supply Europe with oil are now looking heavily at Latin America and Africa as their next big suppliers. So far the Russians have been making up the difference in oil by selling to China and India, but the problem there is supply lines.
It isn’t easy to move oil. It’s expensive and a bit dangerous to move it in train cars, so you want to build pipelines if you’re moving it overland. But a 1,000-mile – or in the case of Russia, a 2,000-mile or longer, oil pipeline is a massive, multiyear, super-complicated endeavor. And Russian pipeline infrastructure is nothing like ours, for example. That shouldn’t be a surprise, as much of Russian territory is essentially permafrost and a lot of the rest is abject wilderness. That, coupled with the sheer distances involved in moving oil from Siberia or the Caspian Sea region to markets where it can be sold and refined, means getting Russian oil to market isn’t easy.
Worse, as Zeihan says, all of the big Siberian oilfields have been developed using Western companies and those guys are pulling out. So the technical expertise needed to maintain production in those fields is drying up and so is the production.
That means a lot of Russian production is likely to go offline over the next few years, which is bad news for a lot of oil consumers but principally China. It isn’t particularly bad news for the good old USA, because we make enough oil to supply our own markets and that way all we need is semi-intelligent political leadership and we’ll have cheaper energy than anywhere else in the world.
It’s not exactly an optimistic view he’s pushing. It’s a view which says the American economy might not be great for the foreseeable future but it isn’t likely to collapse like everybody else’s is about to.
Anyway, here’s the video. He raises some interesting points based on real things, but only time will tell whether Zeihan’s conclusions are legitimate.