How Energy Markets Are Shaping Putins Invasion and the World
Nearly every dimension of the Ukraine-Russia conflict has been shaped by energy markets.\n\nRussia\u2019s oil and gas exports have long been the foundation of its economy and geopolitical strength. Vladimir Putin\u2019s decision to invade Ukraine \u2014 like his annexation of Crimea in 2014 \u2014 coincided with high energy prices. While Western sanctions have dealt a major blow to Russia\u2019s financial system, European carve-outs for Russian oil and gas have kept hundreds of millions of dollars flowing to Moscow every day.\n\nAs a result, energy policy has become foreign policy. European countries are doubling down on their commitments to decarbonize in order to reduce their dependence on Russian energy as quickly as possible. The United States has banned Russian oil and gas imports, and in the wake of spiking gasoline prices, the Biden administration is looking for any opportunity to increase the world\u2019s oil supply, including the possibility of normalizing trade relations with previously blacklisted countries like Venezuela and Iran.\n\nBut the intersection of energy and geopolitics extends far beyond this conflict. Energy is the bedrock of nations\u2019 economic prosperity, military strength and geopolitical power. Which means energy markets are constantly shaping and reshaping global dynamics. You can\u2019t understand the way the world operates today if you don\u2019t understand the global flow of energy.\n\nThere are few people who have studied energy markets as closely as Daniel Yergin has. He is an economic historian and writer who has been called \u201cAmerica\u2019s most influential energy pundit\u201d in The New York Times. And he\u2019s the author of numerous books on the intersection of energy and geopolitics, including the Pulitzer Prize-winning \u201cThe Prize: The Epic Quest for Oil, Money, and Power\u201d and, most recently, the best-selling \u201cThe New Map: Energy, Climate, and the Clash of Nations.\u201d\n\nWe discuss how Putin\u2019s invasion halfway across the world caused gasoline prices to rise in California; what would happen to European economies if they decided to cut off Russian gas; how the U.S. shale revolution has transformed the global political landscape; why, when it comes to China and Russia, Yergin believes that \u201ca relationship that was once based on Marx and Lenin is now grounded in oil and gas\u201d; whether Donald Trump was right to be skeptical of Nord Stream 2; why decarbonization is not only beneficial for the climate but also crucial for national security; whether the Biden administration\u2019s response to spiking energy prices is putting its climate agenda in jeopardy; why Yergin thinks hydrogen power could become central to combating climate change; and much more.\n\nBook recommendations:\n\nPutin\u2019s World by Angela Stent\n\nThe Power of Law by Sebastian Mallaby\n\nThe Cloud Revolution by Mark P. Mills\n\nThoughts? Guest suggestions? Email us at ezrakleinshow@nytimes.com.\n\nYou can find transcripts (posted midday) and more episodes of \u201cThe Ezra Klein Show\u201d at nytimes.com/ezra-klein-podcast, and you can find Ezra on Twitter @ezraklein. Book recommendations from all our guests are listed at https://www.nytimes.com/article/ezra-klein-show-book-recs.\n\n\u201cThe Ezra Klein Show\u201d is produced by Annie Galvin, Jeff Geld and Rog\xe9 Karma; fact-checking by Andrea L\xf3pez-Cruzado; original music by Isaac Jones; mixing by Jeff Geld; audience strategy by Shannon Busta. Our executive producer is Irene Noguchi. Special thanks to Kristin Lin and Kristina Samulewski.