THE war in Ukraine is now part of three interlocking wars: the physical war, the information war and the economic war. If we want to know what today’s hybrid war looks like, this is it. This is what the US has been preparing for and is now executing, with its control over the world’s biggest digital platforms and weaponising the dollar. Russia is slowly but surely reaching its military targets in Ukraine, and it is possible that Ukraine and Russia’s talks will soon lead to a winding down of the hostilities; even if the US and NATO countries are quite willing to fight Russia to the last Ukrainian. Unwinding the economic war will be much harder, as sanctions, once imposed, seem to acquire a life of their own.

At the core of the economic war is an energy war, as Russia is a big supplier of oil, natural gas and even enriched uranium to the European Union (EU) and the United States. The West, the EU, the US and UK had chosen natural gas as the bridging fuel before reaching a net-zero carbon emission future. With the sanctioning of Russia, this path is in jeopardy. Phasing out of coal might now be delayed to meet the shortfall in energy because of cutting down Russian gas imports. Worse, importing liquified natural gas (LNG) from West Asia, North Africa and the US as a replacement instead of piped gas will lead to additional methane emissions. Methane is a greenhouse gas with a global warming potential of 80 times that of carbon dioxide.

Methane, the major component of natural gas, exists naturally in gaseous form. It has to be cooled to a liquid state – or LNG – to reduce its volume so that it can be easily transported in tankers. For transportation, it is evaporated continuously in small quantities to keep its temperature at minus 160 Deg C to maintain its liquid state. Switching to LNG means adding methane, a potent greenhouse gas, to the atmosphere. Even if Russian piped gas can be replaced volume per volume by LNG, the additional methane in the atmosphere will mean the EU’s global warming targets using natural gas as a bridging fuel will take a huge hit. As EU is a significant contributor to global greenhouse gas inventory, we may be in danger of losing our war with nature and global warming as a by-product of the west’s economic war on Russia.

A brief look at the numbers of natural gas imports will explain the significance of Russian gas to the EU. The EU imported 155 billion cubic metres – almost half (45 per cent) – of its natural gas requirement from Russia. Even if LNG is available in the international market, the EU currently does not have the re-gasification and the pipelines from its ports to handle this extra volume of LNG. That is why even during the current sanctions, the EU has kept both the Russian entities supplying it with gas and the banks that deal with the payments for gas supplied outside of sanctions.

According to International Energy Agency (https://www.iea.org/reports/russian-supplies-to-global-energy-markets/oil-market-and-russian-supply-2), Russia is the second-largest exporter of crude oil in the world, ranking just after Saudi Arabia. If we include condensates and other petroleum products like fuel oil, naphtha and other condensates, according to IEA, Russia is actually the largest supplier in the world. So while in the west’s attack on Russia’s finances, it has been easy to use the US control over the dollar to freeze – or in effect seize – Russia’s money stored with the western banks, it is much more difficult to do without the continuous flow of Russia’s piped gas to Europe; or the consequences of taking all other Russian energy petroleum and petroleum product supplies out of the global market. The current sanctions have already raised the price of oil to $132 per barrel from $60 last year; even if it has dropped marginally after the release of strategic reserves of the US into the market and OPEC accepting to raise production. The current rise to $120-130 per barrel has to be seen in the context of oil price per barrel being in the range of $60-65 for most of last year. The US of course, has a vested interest in raising the price of oil in the international market: its fracking gas becomes economically viable only if the international prices of oil are high.

The adverse impact of high energy prices is obvious for developing countries, most of whom including India, import their oil. A rise to $200-250 – more than three times from the prices last year – as is being predicted by a set of oil experts, will be an even bigger disaster to their economies. We are likely to see a further contraction of the global economy with a combination of stagnation and inflation. India, as a big importer of petroleum and petroleum products, is particularly vulnerable, as its economy has been slowing down in the Modi years, accompanied currently by high rates of inflation.

The seizing of Iran, Libya, Venezuela, Afghanistan, and now Russian foreign exchange reserves in the US, UK and EU has brought out the dangers of the financial control that the US and its allies exercise over the world. If this can be done not to smaller third world players but to one of the largest economies in the world with its huge foreign exchange reserves, what does it say about finance capital and imperialism in the current era? Every country that has a foreign exchange surplus now has to regard this not as its strength. Their dollar, pound or euro reserves are hostages they have given to the west, in the way vassal rulers had to give their children to be brought up in imperial courts.

The energy issue goes far beyond the differences between countries and which country gets to dominate the world. We have a short window before we can reverse the worst-case scenario of global warming becoming inevitable. With the focus of the west squarely on how to subjugate Russia and then China, it is clear that a cooperative future for humanity to combat global warming is not on the agenda.

Russia is not simply a petro-state as the US would have us believe. It was forced into greater self-sufficiency after Yeltsin’s kleptocratic years and the virtual subjugation of Russia gave way to its trying to re-emerge as an international player. Even today, the US buys a large number of advanced rocket engines from Russia for its satellite launches. In arms and military hardware, it is on par with the west, as was visible in Syria.

NATO’s expansion, the US walking out of the Anti-ballistic Missile Treaty, followed by Open Skies Agreement, the Intermediate-Range Ballistic Missile Treaty, positioning missiles in Romania and Poland, were all seen by Russia as the US implementing a winnable nuclear war strategy. The war over Ukraine was foretold by George Keenan, Henry Kissinger and John Mearsheimer: they had all predicted the inevitability of a clash between NATO and Russia if the US pursued a policy of eastward expansion of NATO. None of them holds progressive or anti-imperialist views, with two of them – Keenan and Kissinger – being arch-imperialists instrumental in building the current US empire.

The only block of countries that have lost in the current Ukraine war – apart from Ukraine itself – is European Union, particularly Germany and France. They will be far more dependent on the US, as they have to import LNG from the US and West Asia. Germany, by imposing financial sanctions, and foregoing its gas imports from Russia built during Willy Brandt’s Ostopolik era, has given up its independent position either in Europe or in world affairs.

The Ukraine war is a watershed moment for the world. Every country in the world will have to address the dollar hegemony that the US has asserted on Ukraine over Russia: surrender or else. This is now an existential challenge for the world: build a more democratic international financial architecture or surrender to the hegemony of the dollar. How countries meet this challenge will decide the fate of the 21st century.