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August 18, 2024 - 5:00pm
For some western companies working in Russia, taking a moral stance isn’t necessarily logical. The world’s largest oilfield services group, American company SLB, has been reported as expanding its operations in Russia, posting 1,000 job ads since December and registering two new trademarks through local subsidiaries last month.
SLB’s two main US competitors sold their Russian business to local managers following the invasion of Ukraine in 2022, but SLB never committed to doing the same — and now appears to be capitalising on the lack of competition. Ukraine’s National Agency on Corruption Prevention has described SLB as an “international sponsor of war,” but the Kyiv School of Economics has found that only 11% of international firms have left Russia since the war began, and that those staying are “using their momentum to take the market share of those who are leaving or left.”
Despite US political rhetoric condemning cooperation with Russia — Washington recently described Hungary’s continued use of Russian fossil fuels as a “dangerous addiction” — hundreds of major US businesses continue to work there. Earlier this year, the CEO of American food giant Mondelez claimed investors don’t “morally care” about staying, and that it’s the risk to their assets that drives decision-making.
The stakes are particularly high in the energy and fuel trade, given Russia’s superpower status in raw materials, and cutting off Moscow has never been as simple as politicians would have us believe. NGO Global Witness found that in 2023, the EU imported 130 million barrels of “laundered” products worth a total €1.1 billion from refineries processing Russian crude. The EU is currently paying hand over fist for Russian gas following the invasion of Kursk, which endangers pipeline gas flows to Central Europe via Ukraine.
In this context, investors who care more about the bottom line than making a moral statement may be questioning the zeal of companies which exited Russia. The boss of Swiss-based oil and gas firm ABB, which has already exited the country, has lamented the “competitive advantage” enjoyed by those who stayed.
This is a conundrum for Washington, given concerted efforts by the US to become Europe’s new fix for fossil fuels (the US now provides around half of the EU’s LNG supplies, up from a quarter before the war). The US Department of State admits that while it is “committed to reducing Putin’s profits,” when it comes to the work of companies such as SLB, “simply aiming to stop the flow of Russian oil would have serious consequences for the global economy.”
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SubscribeInteresting perspective. i wonder why (if accurate) the involvement of US commercial interests in Russia haven’t been subject to greater scrutiny before?
I’ve no particular view on whether those interests are a good thing or a bad thing. They do represent a degree of hypocrisy which shouldn’t come as any surprise, but which also suggests there’s a great deal of gaming going on within political circles to which the fresh air of publicity and analysis needs to be brought.
I write this, also in response to the whining of those who post about cancelling their Unherd subscription. Just go, if you wish, but do it quietly, whilst reflecting on the possibility of missing out on such articles whilst withdrawing into your bubbles.
Because to address your first point, to some degree nothing they tell is the truth really is. No reality they push on is really truly as the world is.
Because the business dimension of war rarely gets the attention it deserves. Wars require goods and services, including oil. That means businesses have to where the oil is. They have to make profits so that they can pay their staff and remain in business. They also have to pay taxes so that wars, which are very expensive, can be prosecuted. So you can see why Governments tend to be a bit vague about the commercial aspects of war.
What does it profit it a man to gain the whole world, and lose his own soul?
Hopefully Ukraine will rain missiles down on Russia’s oil and gas infrastructure. These companies may regret staying when the assets in question are ablaze.
Pretty unlikely since they already have a major Russian pipeline through Ukraine and are receiving huge amounts of money from Russia for letting it continue.
Yeah, but that could blow up anytime. Things do tend to explode, you know.
Ukraine is not all that popular outside of Europe and the US, especially in China, India, Africa and Latin America. If Ukraine were to cut off Russian energy shipments to these countries, Ukraine would lose even more popularity. Even Europe still depends on Russian natural gas.
Committing the war crime you keep proposing would do Ukraine more harm than good.
Well, all of that needs to stop. China, India, Africa and Latin America can get Russian gas by other routes. Europe needs to stop doing business with Russia in relation to anything, now and into the future. I laugh when anyone describes destroying Russian oil assets as a “war crime”. They obviously don’t think that Russia bombing a maternity hospital is a war crime, nor all the raping, torturing and murdering they have already done in Ukraine.
War crimes are no laughing matter. Russia has committed war crimes, but that doesn’t excuse Ukraine from committing them too.
When a Ukrainian soldier tortures, rapes and kills civilians or puts a bullet through the brain of a prisoner it doesn’t matter that Russian soldiers have done more of it. It’s still wrong
Attacking civilian infrastructure to inflict economic damage on the enemy has been outlawed since just after World War II. Some of the actions of both sides in that conflict were barbarous.
We need to honor the Geneva Conventions, and not just in the breach.
Russian oil sales to foreigners fund Russia’s military. That alone makes the facilities that produce them fair game. While I cannot discount the possibility that individual Ukrainians have committed war crimes, Russia commits them as a matter of standard practice, and always has. I’m sure the Russian Military Manual has a section which is headed “War Crimes”, which broadly says “Go for it! Here are some particularly nasty ones that we recommend!”
So the US provides around half of the EUs LNG supplies, up from a quarter before war. Sounds like everyone’s doing nicely out of this war.
Have you ever wondered why the US was so keen on pushing this proxy war since the outset and why it scuppered the peace deal that was on the table in April 2022?
Could it be because Putin is evil, and Russia needs to be stopped for the good of the world?
Could you explain the threat of Putin to the world?
Your attribution of altruistic motives to the MIC is touching, but nevertheless naive.
Articles like this coming out are part of a larger U-Turn that is going on in the West where now we’re hearing that Germany isn’t going to provide any more money or weapons to Ukraine, and then we have the narrative U-Turn on just who blew up the Nord Stream pipeline.
The new narrative (which the details are probably also not completely true) is essentially that Ukraine did it. So some German lawmakers are upset that Ukraine did all this damage to their economy and now they want compensation. These are all signs of the beginning of the end. It’s also the beginning of all kinds of different information starting to come out where we all find out we’ve been misinformed about a bunch of things by the establishment media and politicians and , oh well, it’s all water under the bridge now, and apparently there is going to be some other existential threat to our existence we need to focus on now anyway, so get with the program. All that’s old news. We have new news to deal with, and we will be told (and nudged towards) what side of what issues we must be on for democracy (not you) to survive.