While governments were deciding whether to introduce sanctions on Russia and oil companies were choosing whether to move away from their oil operations in the country, an unexpected and powerful new force was developing. Over the last week, there have been several acts of resistance around the world as oil workers refuse to welcome Russian oil supplies into their countries. Now, it seems these widespread acts are beginning to influence the decisions of governments and oil majors around the world.
While the U.S. has now banned Russian oil and gas imports, European nations and several oil majors have continued to buy Russian crude with no obvious alternative to meet global demand. Several Big Oil firms have pulled out of projects in Russia, including BP, Exxon, and Shell, and major companies in other industries are also joining the boycott.
Shell came under fire for purchasing Russian crude at a major discount and has now apologized and withdrawn from dealing with Russian oil. The fact that this pressure forced a U-Turn from the oil giant emphasizes just how sensitive these big public companies are to both external and internal pressure.
The decision by European governments not to impose sanctions on oil and gas imports is driven by staggeringly high energy prices and fears of an oil and gas shortage. US Secretary of State Antony Blinken claimed that the U.S. is working with European powers to figure out how to replace Russian energy in the future. Germany, as one example, has attempted to accelerate its renewable energy transition and is building two new LNG terminals.
But many oil and supply chain workers are refusing to stand by and wait for governments and energy firms to make the decision. Oil employees around the world have been taking it into their own hands recently as they refuse to offload cargoes or handle Russian oil supplies
In the U.K., dock workers have taken a stand by refusing to unload Russian oil and gas. While the U.K. government has banned Russian ships from docking at British ports, they can still deliver energy supplies using foreign ships. But members of the U.K. union Unite are declining to help with the unloading of these ships. The General Secretary of Unite, Sharon Graham, tweeted of the matter “I am very proud of @unitetheunion’s members taking a principled stand to prevent Russian oil coming to our ports. But it is appalling that they have been put in this position by the @GOVUK, which is still dragging its feet on sanctions.”
Meanwhile, in the Netherlands, workers are also taking a stand, and preparing for potential legal repercussions for refusing to offload the cargo. A spokesperson for Dutch union FNV Havens, Niek Stam, stated that “There is blood on this oil, blood on this coal and blood on the gas … We are in the process of finding out how we can boycott it without risking an enormous fine in court.”
Unions and workers in Australia, Canada, and the U.S. have also joined the efforts to halt the delivery of Russian oil and gas cargoes. Other EU countries are now expected to follow the U.K.’s example by banning Russian cargo ships from docking at their ports. And several shipping companies, including the world’s largest container lines, Mediterranean Shipping Co., and A.P. Moller-Maersk A/S, have also refused to ship Russian cargo. Although some container companies, particularly from Asia, are still offering their services to Russia, such as China’s Cosco Shipping Co.
The response by banks, unions, workers, shipping companies, and oil firms is having a clear impact on the supply of Russian oil to the rest of the world. Non-oil sanctions on Russia have made it increasingly difficult for oil firms to interact with Russian banks and other institutions, restricting oil and gas operations between foreign companies and Russia.
CNN reported that an estimated 4.3 million bpd of Russian crude was already “missing from the market because Western buyers are refusing to buy it,” according to JPMorgan head of global commodities Natasha Kaneva. Further, “It’s increasingly clear that the Russian [oil] volumes are being ostracized,” and “we are experiencing a shortage at the moment,” she stated.
And a New York Habor trader explained, “People are not touching Russian barrels. You may see some on the water right now, but they were bought prior to the invasion. There won’t be much after that.” He added, “No one wants to be seen buying Russian products and funding a war against the Ukrainian people.”
So, while governments hold off on introducing sanctions on Russian oil, will it be unions and workers from around the world that force their hands? With banks and other institutions also making it increasingly difficult to conduct business with Russia, and shipping and oil employees refusing to interact with Russian cargoes, pressure will only mount on governments and companies alike to take even more action again Russia.
By Felicity Bradstock for Oilprice.com