"The West Is Addicted To Russian Oil & Gas" Featuring Alexander Zaslavsky, Horizon Engage & Gabe Collins, Rice University

C.O.B. Tuesday

Today we had the pleasure of welcoming back Alexander Zaslavsky, Co-Founder and Managing Partner of Horizon Engage. Alex established Horizon Engage in 2003 and specializes in energy politics in Russia and the former Soviet Union. Horizon Engage merges tech and geopolitical expertise to provide country insights, data on how sanctions and counter sanctions impact your business, security analysis and advisory solutions. To help navigate a meaty Russian/Central Asian/Middle Eastern geopolitical discussion, we called on our good friend Gabe Collins to jump in as a cohost. As you may know, Gabe is a Baker Botts Fellow in Energy and Environmental Regulatory Affairs at Rice University’s Baker Institute for Public Policy. We were thrilled to visit with Alex and Gabe.
In our discussion, we address various aspects of the ongoing war in Ukraine, including its impact on alliances and energy security in Europe, business takeovers in Russia following Western companies’ divestment from Russian subsidiaries, and the domestic impact of the conflict with what Gabe refers to as the “Wagnerization of Russia” where families are getting large cash payments for the service (and death) of their male soldiers. We explore the sustainability of Russia’s military endeavors and the potential for escalation, the intensity and effectiveness of Russia’s internal propaganda about the war, the lingering effect of Prigozhin’s legacy (and popularity with the Russian people), and the significance of Russian oil for the country’s economy and its role in funding the war effort. We discuss the Biden Administration’s approach in Ukraine which seems to fear a Russian loss as much as a Russian win, China’s industrial base and its support for Russia in the conflict, the effectiveness of Western sanctions against Russia and lack of real enforcement, potential NATO actions, and geopolitical considerations with COP29 set to be hosted in Azerbaijan. Alex provides insights into potential outcomes of the conflict in Ukraine, geopolitical dynamics and alliances in the region, strategic considerations of Western powers regarding their approach to Russia, the influence of financial institutions like the World Bank, the many mistakes both sides have made in all this, and much more. It was an engaging discussion that highlighted the complexity of geopolitical and economic factors at play. Thank you to Alex and Gabe for joining!
Mike Bradley kicked us off by highlighting that most markets this week are focused on one item and that’s the April CPI print due to report on Wednesday morning. On the economic front, Tuesday’s April PPI printed much hotter than expected and the 10-year bond yield unexpectedly decreased to end the day at ~4.45%. On the commodity front, he noted the spike in near-month copper futures to an all-time high (>$5/lb.). He also noted the copper curve has recently shifted from long held contango to a steep backwardation structure which is likely due to a near-month contract squeeze and improving S/D fundamentals. On the broader equity market front, equities so far this week have traded sideways in anticipation of Wednesday’s CPI print which likely could lead to elevated equity market volatility for the remainder of the week. He ended by highlighting the progression of ten stats (bond, commodity and equity) since Alexander’s previous COBT appearance in December 2021.
For our COBT history buffs, today’s episode marks Alex’s fourth guest appearance on COBT. He previously joined on December 7, 2021 (episode linked here), May 19, 2020 (episode linked here) and first on April 7, 2020 (episode linked here). Today’s episode also marks Gabe’s third guest appearance; he previously joined on August 23, 2023 (episode linked