End of an Era: Russia’s Grip on Oil is Dwindling, Says Daniel Yergin | Amanpour and Company

president zielenski is renewing his calls for an embargo on russian oil as the west continues to sanction russia author of the new map daniel jurgen is a leading authority on energy and the global economy and he joins walter isaacson to analyze how this war has impacted everyone's reliance on russian energy thank you chris john and dan jorgen welcome back to the show thank you walter i'm glad to join you again it's been two months since this war has been going on you wrote a great book called the new map about energy and world politics how has this uh war changed forever the energy map of the world the big change is the change it's going to make in the role of russia russia has been an energy superpower putin said he didn't like the term but he liked the money in the political clout but i think russia's days as an energy superpower are now receding do you think that europe can wean itself from russian oil i think it can i think it will take time to do that i think the pressure since what's happened the last two weeks is really added to the momentum not for sanctions that will play out in two years from now but sanctions much more quickly because putin is earning a lot of money from oil and gas right now how much is he earning each day well i can tell you i was just looking at the numbers from europe alone if you annualize from where he is today it'd be like 250 billion dollars just europe and europe's only about half of his oil sales so if europe cut off uh oil sales from russia how big of a dent would that put in russia's economy oh it's a big deal because uh oil and gas together are around 40 percent of the total russian budget uh and also obviously foreign trade so uh it would be a a big hit and i think that's why you see right now the ukrainian government is really leading the campaign to get people to self-sanction and ultimately to get to sanctions and we see we see that working we see dock workers refusing to unload russian oil banks not writing letters of credit so it's going to get more and more difficult for russian oil anyway and i think the eu is getting closer to some outright ban but isn't oil a commodity and if the russian oil isn't sold to europe it'll just be shipped to china or somewhere else i think that's certainly partly true and we can already see india is saying we want to buy russian oil particularly because we can get it at a big discount and we can pay in rupees not in dollars but i think that only some of that oil will get sold i think it will be there'll be physical logistical issues there will be issues about being able to get insurance for tankers uh and a host of other things that will impede it so some of it will get sold uh but some of it won't and by the way it'll be sold at a big discount is there any way to get india and china to try to stop importing russian oil or are they totally dependent on it i think china's not totally dependent it gets a lot of oil from russia it gets a lot of oil from the middle east i think there's very little uh influence on china to get them to buy less oil i think there's going to be a lot of diplomacy with india because of course india has also gotten closer to the united states on this group of countries that are sort of around china with australia and japan so i think there's going to be a big focus and biden just had a phone call with modi where you can be sure that this would have been one of the topics so when biden talked to prime minister modi of india what would be his ask well his ask would be an energy front which is not to pick up slack on on russian oil and to talk about all the areas where the u.s and india can collaborate india of course has a long historic relationship with russia and unlike its relationship with china which is fraught with tension it's been a partnership and a substantial part of the indian army is equipped with russian armaments so what i hear from indians they say well the us is some is a fickle friend and russia has been our long-term friend so i think india is still trying to find its uh is trying to balance between the two one of the things president biden did was open up the strategic oil reserve in fact he opened up the spigots pretty wide uh explain that to me and what he can be doing in that regard well the strategic petroleum reserve was basically created after the 1970s oil crises so that you were prepared for an emergency of disruption and we are looking at a disruption in world energy right now uh particularly as this war goes on and uh it's it could be more serious than that of the 1970s because it involves not only oil natural gas and coal it also involves the two nuclear superpowers so using the strategic petroleum reserve i think it's a really smart idea to use it at scale because it uh it got it gets a lot of oil into the market helps reduce the um the potential shortage because it was a very tight market anyway going into the crisis uh so it's a it's a big development walter the other big development that's affecting the oil market right now is the resurgence of covet and china which is taking chinese oil demand down and you see the oil price inching downward because of covet and china as well as the release of the strategic petroleum reserve should biden be doing more to promote u.s domestic production of oil and shale oil and natural gas and liquefied natural gas it goes against his climate policy instincts but isn't this a time where we need to balance those well we've certainly seen that change starting around november when the biden administration actually started calling for more oil and gas production because right now if it was not for the shale revolution in the united states where not for the fact that the us is the world's going to be the world's largest exporter of lng europe would be in a much worse situation and so i think there's been a grudging recognition that this is a great strategic asset for the united states and a great strategic asset for europe and increasing production i think walter if i can add just one thing that would be helpful is to put away those old slogans like uh price gouging which really don't connect to what's happening in a global in other words biden is accusing the oil companies of price gouging and you say you should stop this is a global market where you have basically a shortage situation and what i think the lessons of history show that when you're in a crisis when you're in a war time and this is a war time right now you need close collaboration between government and the companies in order to manage the complex logistics and supply chains that keep 100 million barrels a day of oil flowing around the world and so you know kind of uh political rhetoric is not what you need what you need is cooperation you run the most influential energy conference in the world sarah week which happens in houston each year and this year you had uh john kerry the envoy for climate and i think he was pushed quite a bit on shouldn't we balance our desire to fight climate change with a need right now to increase oil and gas production how did he play that out he did see that this is a grave international crisis and that part of the solution to it does involve u.s oil and gas production because otherwise you know you could see what happened in the election in france the the first round with marine le pen if you have turmoil and shortage and prices shooting up then this coalition to deal with putin's war in ukraine can really erode and so you need to balance your climate objectives your long-term objectives with the reality is that we're now in a crisis but if you create more pipelines if you allow more export of liquefied natural gas if you allow more oil production would that have any impact within the next couple of years well i think so i mean this year u.s oil production could increase by a million barrels a day which is more than the entire increase in all the rest of the world that would be a significant factor and i think that europe as well as other countries now regard us lng as a source of stability and security and now but you can't build these things overnight pipelines take time lng facilities take time germany has said uh chancellor schultz has talked in his uh zeitung vendor his uh change of euro that germany is now going to build receiving terminals for lng but you know it'll take two or three years to get those built but that's to so that they have to to cut down on imports of russian gas and be able to import lng some of which will come from the united states how is this new policy in germany uh going to play out is this really going to be a shift in germany's uh role vis-a-vis russia well the zeitung zeitung vendor means a change of errors and i think it is a change of errors germany has pursued a you know a sense of interdependence with russia and i think the trade that germany had with russia that built up with russia actually helped to erode and with the soviet union helped to bring down the iron curtain but i think germany has now said uh we're through we don't want to be uh dependent upon russia anymore it's not a reliable supplier it's an unwanted supplier and i think that is more broadly affecting the overall economic relations because remember germany is much more connected to russia as are other european countries than the united states because of proximity but they're saying we're going to change and we're going to go in a different direction we're going to increase our defense spending we're going to strengthen nato this is all a big change and one of the many miscalculations putin has made he wanted to undermine nato what he's done is reinvigorated nato and he's turned germany in a very different direction you say nato has been reinvigorated but are you worried about the elections happening in france and that there may be a populist backlash especially with the prices going up absolutely because we're looking not only in energy crisis but a food crisis and marine le pen has very cleverly pursued a campaign based on economic issues less on immigration and of course she's touched people's pocketbooks and so i think that goes back walter to what we're talking about the need to really manage where we are today to avoid really big price spikes that will lead to the kind of political reaction that will undermine uh this unity i mean she said that you know she's against nato so um that's why you have to take a whole holistic view to this crisis and not look at it in different pieces well you talk about price spikes uh gasoline at the pump is like six dollars some places in the united states how long is that sustainable and is that going to cause political problems i heard president obama once say that the correlation between his popularity and gas prices at the pump was the strongest political correlation there was i think it's very much on the minds of both democrats and republicans looking at the november election uh these prices you know if you're a nurse or a teacher and you're driving 25 miles a day to work these costs really hurt and so uh you know so they are very politically significant get you back again to the question to manage this in a sensible uh way uh obviously in in europe the prices because of tax are actually a lot higher and that is a very very big political factor there so i think around the world we're going to see the politics of nations roiled by energy prices and by the way that other crisis food prices well let's start with uh energy prices what could be done to bring down the price of oil at the of gasoline at the pump well you know you have to add up a lot of different things you use the strategic petroleum reserve you get this kind of cooperation i've talked about between government and industry to manage the logistics obviously some more oil from the middle east would be helpful and uh and then you you know you do have whether we'll have some kind of demand restraint or people just changing behavior but all of those things come together as we you know this is a very tight spot that we're in right now you talk about the possible rise in food prices what would be driving that and how could that be ameliorated 30 of world wheat comes exports come from uh ukraine and and russia and a lot of that is just stopped the ukrainians can't use their ports that the crops will rot uh if a they're a major exporter of eggs you go down the list you have all those things and something else that people don't realize but if you look at all the costs of food about 70 of the cost of food actually is energy from fertilizer from tractors from trucks to move it and so all those energy costs also feed into the price of food and the middle east is particularly dependent upon wheat from uh from russia and ukraine and of course it was high food prices that set off the arab spring in 2011 very much on the minds of leaders in that part of the world we're in this struggle with russia and it especially involves your specialty energy and yet we're trying to engage in this struggle while also having a bad relationship with china a bad relationship with the saudis and up until recently a bad relationship with venezuela is it possible it's still a pretty bad relationship with venezuela so shouldn't we have to repair our relationships with china and venezuela pretty quickly well i'm not sure venezuela i you know uh obviously uh some people from washington went down to caracas to see more oil i think they ought to also go to calgary in canada and get some more oil because i think the canadians can help us out uh too but they've been sort of forgotten but i think china walter that of course is that china is the big that's the big question that's a huge geopolitical question for the 21st uh century is u.s chinese relations and generally they're going in in the wrong direction and that's really the real threat so how to manage those relations and given that the politics of the us is increasingly antagonistic to china and china is certainly increasingly antagonistic to the united states that is a you know it's a subject for another conversation because it's it's so big and complex and the risks are so obvious does this crisis increase the role that nuclear power can and should play and should european countries be not shutting down nuclear plants and should we in the united states be more willing to open nuclear power plants that's a very sensitive question because particularly the germans made the decision over a weekend to shut down their nuclear power which provided i think about 20 percent of electricity so they're using more gas including russian gas to produce electricity and they're shutting down at the end of the year their last three nuclear power plants but i think we've seen we've seen a real turnaround on nuclear power uh president macron came into office saying that he was going to we cut back on french nuclear which provides about 80 of the electricity he's now said they're going to build six new reactors and maybe another eight britain has just come out with a new energy security doctrine uh that also includes more nuclear and going back to our our sarawe conference uh walter i heard a number of ceos talk about small nuclear reactors as though you know these are going to be reality by the end of the decade so i think there is a turn on uh nuclear power going on right now seeing it as part of the mix both for security and also for energy transition issues dan yorgen thank you so much for joining us thank you walter and good to be with you again [Music] [Music] you

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Length: 16min 46sec (1006 seconds)

Published: Tue Apr 12 2022