Blood Diamonds, Blood Oil
March 10, 22First it was blood diamonds, now it's blood oil.
Blood diamonds fuelled civil wars in Angola, Ivory Coast, Liberia and the Democratic Republic of Congo in the 1990s. Today Russia stands accused of funding its invasion of Ukraine with what critics are calling blood oil.
On Tuesday, US President Joe Biden announced an import ban on the country's oil and gas. The UK has pledged to sanction oil, though not gas, by the end of the year. The 27-nation European Union remains divided, while other key importers, notably China and Belarus, are unlikely to impose bans.
"Russian oil is funding the invasion of Ukraine and the murder of innocent people," according to Oleg Ustenko, an adviser to President Volodymyr Zelenskyy of Ukraine, "just as money from the sale of blood diamonds fuelled brutal civil war in Africa.
In an opinion piece for today's Guardian newspaper, in the UK, he writes: "We must cut off this funding at source. This trade can and must be stopped through pressure brought by you, the consumer, on companies and governments."
He echoed the view of Ukraine's former deputy minister of energy, who has been calling on European countries to boycott energy products from Russia. Sergiy Maslichenko says Russian oil and gas should have "similar pariah status to that of blood diamonds". In a letter to the Financial Times, he writes: "It is urgent that the west declares an embargo on Russian oil and gas to give them similar pariah status to that of blood diamonds a few years ago. This is the only serious card the west has to play short of military confrontation."
The world has stopped short of sanctioning Russia's diamonds, which represent almost 30 per cent of world supply, although banking restrictions effectively outlaw their purchase. But if Russia's oil should be treated as "blood oil", an inevitable question follows. Should its diamonds be treated as "blood diamonds"?
The Kimberley Process, established in 2003, to prevent such gems entering the pipeline, defines them as "rough diamonds used to finance wars against governments". We could argue that Russia is fighting a war (even if it bans the word in favor of "special military operation") against the government of Ukraine (even if it doesn't recognize it as such). Technically that might work as an interpretation, although it misses the KP point, implicit in "against governments" that it's concerned with diamonds being used to fund a rebel uprising. That said, can it fairly be accused of financing it with diamonds? Alrosa sold just under $4bn of rough diamonds in 2021, an increase of over 50 per cent year-on-year. The Russian government owns a third of the company, so its share of the revenue would be about $1.3bn. But that's a small drop in the very big ocean of overseas energy sales. Russia exported $110bn of crude oil in 2021 and $55.5bn of natural gas, a total in excess of $165bn.
As we read of Russia's deadly air strike on a maternity hospital in the city of Mariupol, it's not hard to see why Ukraine is calling for a global boycott of the commodities that are funding it. Oleg Ustenko and Sergiy Maslichenko's use of the word "blood" to describe Russia's oil is highly charged, but let's appreciate the difference between oil (which arguably does fund the war) and diamonds (which don't).