Ukrainian Fallout.

• Author: Kupchan, Cliff

The war in Ukraine will have several underappreciated, longterm implications for the future of international relations. For one, it will spur deglobalization, especially in the energy and food sectors. The war has the potential to lead to armed conflicts between Russia and the West; the rupture of ties will have a profound impact on global stability. Notably, the war clarifies that the current bipolar period in international relations will be less stable than its unipolar predecessor, though the impact of the war will not change the bipolar structure of the international system.

The war exacerbates many of the effects of the COVID-19 pandemic on international relations. One key impact of the twin crises is that they observably and significantly spur deglobalization by disrupting previously reliable supply chains. Both crises have prompted a sharp inward focus by elites as they perform the most basic function of the nation state--to protect citizens. Leaders focused on domestic jobs. They erected barriers to movement of goods and capital to protect their constituents. And they adopted more expansive definitions of national security.

Like the pandemic, the war in Ukraine will last for many years, which will amplify its impact as a long-term driver of deglobalization. Both sides want the same land, believe time is on their side, and have no trust in the other. Ceasefires are possible, but lasting peace will be elusive.

The war will propel ongoing deglobalization and decoupling in four ways. First, the commodity and supply shocks it caused will strengthen policymakers' proclivity to encourage redundant and resilient supply chains, "friend-shoring," onshoring, regionalization, and stockpiling. Second, the sheer magnitude and force of Western sanctions on Russia will cause other countries to fear that they or their main trading partner could be next, which will likewise catalyze movement toward safer supply chains. Third, China's public sympathy for Russia during the conflict further darkens superpower competition and therefore decoupling between the West and China. Lastly, firms themselves have been burned by both import risks and price shocks, and they too are trending toward redundancy and stockpiling.

Deglobalization's impacts on energy markets. War-induced deglobalization will have a particularly lasting impact on energy markets and food security.

For energy markets, one of the longerlasting effects is the movement of fossil fuel flows toward regionalization--a deglobalization of the market. There are two primary war-related drivers here. First, countries now show an even stronger preference for hydrocarbon supplies that come from relatively nearby and "friendly" countries. The import and price shocks of the Ukraine crisis have greatly strengthened this motivation. Also, especially for the United States and the European Union, there is now a preference for "good" over "bad" oil and gas, with the distinction relating to the political orientation of the supplier country.

The first energy grouping is U.S.-Canada-Latin America-EU. The major new plank here is the dramatically strengthened liquified natural gas (LNG) link between the United States and Europe. At current levels, the United States sells about two-thirds of its LNG to Europe, roughly double the prewar level, which accounts for 15 percent of Europe's gas needs. If targets in the tecent U.S.-EU joint statement are met, that figure will rise to well over 20 percent. The U.S. role in supplying Europe's gas needs has grown dramatically, even given the fact that European gas consumption is dropping. The United States has become a strategic partner for Europe in this area. And Europe is de facto replacing "bad" Russian pipeline gas with "good" U.S. LNG. The broader U.S.-Canada-Latin America nexus is wellestablished. Canada sends large amounts of crude to the United States. Latin American producers also primarily supply the United States, but the integration with Latin...