The war in Ukraine is causing major geopolitical contortions reverberating through the energy economy and diplomacy, yielding bizarre negotiations and alliances and huge opportunities for African energy producers.
Consider for example, the precipitous rise in oil prices, which were already stoked by rising inflation and which have been exacerbated the the war. How is the United States responding? By courting oil from Iran.
Consider also the continuing efforts of the United States to re-enter the Joint Comprehensive Plan of Action (JCPOA) to reign in Iran’s nuclear ambitions—the negotiations for which are mediated by Russia—a country that under the plan would obtain and hold Iran’s nuclear material. That’s right—the same Russia that has threatened to use nuclear weapons in its “special military action” in Ukraine.
Rewind back to July 2015 when the Obama Administration finalized the Joint Comprehensive Plan ofAction (JPCOA) with Iran. Under the JCPOA, Iran agreed to eliminate its stockpile of medium-enriched uranium, cut its stockpile of low-enriched uranium by 98%, and reduce by about two-thirds the number of its gas centrifuges for 13 years. President Trump pulled the United States out of that deal, but now, the Biden Administration wants to re-enter the JCPOA.. But Iran refuses to negotiate directly with the US. So all negotiations are taking place through a “neutral” mediator… Russia—a country also suffering under withering sanctions.
And now the United States apparently wants Iran to pump more oil to increase world supply to make up for the absence of oil and gas produced by…Russia. Maybe there is some hidden rationale to justify the forgoing whacky facts…but to us, it makes no sense at all.
Nevertheless,, these curious geopolitical machinations impact the global fuel market and create new opportunities for virtuous investment in Africa’s energy industries. European governments previously reliant on Russia’s oil and gas are increasingly and urgently turning to the resource rich African continent to fulfill their needs.