As protesters stormed the presidential and prime ministerial residences in Sri Lanka on July 9 over energy and staple food shortages and an economic crisis, social media users in the Middle East speculated whether their governments would be next - as markets braced for a supply freeze of Russian gas to Europe and the blockade of crude oil exports from Kazakhstan.
Nearly five months after Russia's invasion of Ukraine, fighting seems certain to rage well into the summer, as Russian troops gradually advance in the Donbass with massive artillery support and Ukraine reportedly attacks Kremlin fuel and ammunition depots with long-range Western weapons.
Last month, the Global Crisis Response Group, set up in March by UN Secretary-General Antonio Guterres, warned that the war had exacerbated already existing crises caused by the pandemic, regional climate change and rising national debt and created the biggest cost-of-living crisis in recent history, causing a "perfect storm" in certain countries.
Sri Lanka is an example of what this can mean, shock prices due to the Ukrainian war after the pandemic saw no profit from foreign tourism, currency devaluation and debt default.
Power outages are frequent, there is not enough fuel to get people to work or school, and a local United Nations humanitarian adviser estimates that nearly a quarter of the population now needs international aid to feed themselves.
An entire generation of the Sri Lankan political establishment appears to have been swept from power in this Sunday's riots. President Gotabaya Rajapaksa submitted his resignation letter on Thursday from Singapore, where he fled after the protests.
There is probably a lot more to come, and beyond Sri Lanka. On Monday, Ukraine's navy reported that eight civilian grain ships had entered the Danube River for the first time since the war broke out, following Russia's withdrawal from Snake Island in the Black Sea, a key step in unlocking blocked exports that have sent global prices soaring growth of over 20 percent compared to last year.
However, shipments from the much larger Black Sea port of Odessa remain blocked, and many silos inside Ukraine have been destroyed by Russian attacks or are still full from last year's harvest as Ukraine begins its globally crucial summer harvest.
Farmers claim that they are struggling to secure sales and finances, find warehouses for grain, and are faced with numerous other problems as a result of the conflict.
Permanent interruption of gas supply?
Energy disorders are as follows. On Monday, Russian gas to Germany via Nord Stream 1 was suspended for what operator Gazprom said was "routine servicing". However, the European authorities fear that the suspension could be permanent - and on Sunday, French Finance Minister Bruno la Mer said that this is the most likely option and that Europe should "be on alert from now on".
Russia is also closing another important pipeline across its territory, which delivers crude oil from Kazakhstan, again citing technical issues.
A prolonged suspension of deliveries via the pipeline, owned by the Caspian Pipeline Consortium (CPC) of Russian and Kazakh companies along with Exxon MobilKSOM.N, Chevron CVKS.N, Shell RDSa.L and Italy's ENIENI.MI, could wipe out 1% of global oil deliveries, according to analysts from JP Morgan. This could potentially cause a new record rise in prices to over $190 per barrel, which would further deepen and worsen the global economic crisis.
The troubles that Sri Lanka is going through at the moment are long overdue, the growth of foreign debt, especially to China, was a huge burden due to the drop in tourism revenues due to the pandemic and the misjudgment of the fertilizer import ban even before the Ukrainian war dealt a double blow to growth food and fuel prices.
However, a number of other countries are in a similar position. In Afghanistan, Pakistan, Lebanon, Egypt, Turkey, Iraq, Argentina, Myanmar and Zimbabwe, these same global pressures along with a host of local issues are also causing trouble. As noted during the Arab Spring of 2011, this can lead to dramatic and unexpected political consequences.
During July 10, Arabic and English search hashtags for the terms “presidential palace”, “Sri Lanka” and “Sri Lanka crisis” were among the most popular across the Middle East. Many users said they sympathized with the protesters, expressing hope that their "despotic and corrupt" governments and leaders could be next.
Complex geopolitical games
In many ways, the currently fevered global markets, politics and economies suit the Kremlin. Despite the difficulty in determining whether the current disruptions in energy supplies are intentional or just part of the standard summer shutdown and servicing, many in the oil market believe it is all part of a carefully crafted strategy.
Since the beginning of the war, Western and especially European continental states have openly talked about wanting to reduce dependence on Russian oil and gas, investing in renewable and other sources. However, little has been done on that front so far, and Germany's huge underground storage facilities used for strategic gas reserves to see the country through the winter are only partially full.
Pipeline disruptions in Kazakhstan could also be an easy win for Moscow. On June 17, President of Kazakhstan Kasim Jomart Tokayev openly said in front of other leaders at the International Economic Forum in St. Petersburg that he does not agree with Putin and that the former Soviet states should not listen to Russia's advice and recognize the separatist states of Donetsk and Lugansk.
In February, Russia sent troops to Kazakhstan to support Tokayev after unrest broke out, and blocking the country's ability to export seems like a classic Kremlin tactic.
However, such geopolitical games are complex and unpredictable. Last Sunday, Putin spoke by phone with Sri Lankan President Gotabaya Rajapaksa as pro-Kremlin social media push the narrative that the current unrest was caused by the United States.
Although Sri Lanka received shipments of cheap Russian oil through India, it was not enough. The forces unleashed by the invasion of Ukraine are global and unpredictable, and no one yet knows where they will stop.
Translation: N. Bogetić
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