Russia’s energy trajectory is circumscribed currently by two historical blunders: the self-inflicted wound of all-out attack on Ukraine starting in February 2022 and the equally self-defeating U.S.-Israeli attack on Iran four years later. Both present risks as well as opportunities and provide agency to Russia to determine its own energy future. To argue otherwise is to suggest that Russia is left with no choices.

Russia was never the energy superpower that it was portrayed to be previously. However, as the world’s largest exporter of oil and gas combined, energy did let Russia punch above its economic weight after the collapse of the Soviet Union. It also allowed Vladimir Putin to build his autocratic regime. Energy remains a key element of state power domestically and internationally.

After 2022, the Russian energy sector began to operate on a survival mode and its prospects became dim. The war against Ukraine destroyed Russia’s energy partnership with Europe. Under economic sanctions, Russia had to improvise by exporting oil and gas to more distant markets at deep price discounts. The longer Russia wages war on Ukraine, which inherently threatens Europe, the more likely this break in longtime energy trade becomes permanent.

Nevertheless, it has been four years since the full-scale invasion and twelve years since the annexation of Crimea and occupation of large parts of Donbas, yet Europe still imports some Russian energy. The current oil and gas supply crisis caused by hostilities in the Persian Gulf may delay Europe’s planned elimination of all imports of Russian energy. If a stable peace with Ukraine were established, as unlikely as this may seem today, the energy trade with Europe might be restored, albeit at a lower level, given how economically compelling it is for both sides.

In any case, European demand for oil and gas was bound to decline for economic, demographic, and climate policy reasons. The new demand centers for energy are in rapidly growing emerging economies, particularly in Asia, and not in the developed West. Putin’s miscalculation in Ukraine prematurely hastened the diversification of export markets for Russian energy at enormous economic cost. However, this was going to happen sooner or later. As new physical and financial infrastructure develops, the structural shift in Russia’s energy trade accelerates. The customers and commercial processes will be different, but Russia will still play an important role in determining how energy flows globally.

Countries in the Global South take no side on the war in Ukraine so long as it is seen as part of Russia’s conflict with the West instead of a colonial war of conquest and plunder of the sort that Western imperialists once waged on them. For these countries, the issue is not so much whether the decline of Western-dominated world order would lead to global disorder but whether it would lead to a multi-polar world in which the interests of the Global South are finally taken into account in the rules for international governance and trade. In this context, Russia can be considered arguably as an asset in a new world order, whereas America under President Donald Trump might be seen as a source of disorder.

Action and inaction of the collective West accelerate the coming of a multi-polar world in which China’s role is crucial, but also the future roles of India, Brazil, South Africa, Indonesia and other countries eager to chart their own independent course. Since 2022, China and India replaced Europe as major destinations for Russian oil and gas. Each brings different equities to the table in a broader bargain with Russia. Whether the Power of Siberia 2 gas pipeline is built or whether India’s energy cooperation with Russia continues are not questions of energy economics alone.

The new energy landscape for Russia will operate very differently from the old one it destroyed in 2022. It may be less lucrative for Russian energy and stymie its full economic potential. However, Russia has proven that it can adapt and could achieve a second-best outcome beyond mere survival.

In addition, the dominance of the energy sector has always been a mixed blessing for Russia, and the Soviet Union previously. Abundant resources masked economic inefficiencies. It enabled a highly centralized economic and political system that hindered development of a diversified economy and society in general. A smaller and less central energy industry may open space for healthier and more balanced development of the country. Of course, this has not materialized yet. With war, decision making becomes even more concentrated in the hands of the state.

The current war(s) in the Middle East and consequent spike in oil and gas prices give Russia temporary respite from the financial strain and economic regression caused by the war against Ukraine. On the other hand, there is high risk that Russia will return to old bad habits similar to previous periods of high prices. The twin oil shocks in the 1970s helped disguise the economic malaise of the Soviet Union but they did not prevent ultimately its collapse as reform came too late for an ossified system. The oil price runup in the 2000s ended post-Soviet economic and political reforms and allowed Putin to build his increasingly autocratic regime.

The current supply shock will cause energy consuming countries to reexamine their reliance on imports of oil and gas and resume their long-term efforts to diversify to other energy sources. It remains critical for Russian leaders to make proper policy choices since oil price spikes are followed inevitably by price slumps, given the time lag in supply and demand responses in a notoriously cyclical industry.

Another interregnum of $100 oil can be yet another false dawn for Russia. It can follow the path of Venezuela and Iran, which in the 1970s stood at the center of the oil world, by continuing to rely on energy for regime survival and personal rent seeking, while their countries head toward long-term decline. Alternatively, Russian policymakers can adapt to an environment in which the energy industry no longer dominates by seeking a path of reform with Russian characteristics. Neither scenario is inevitable and the former may be more likely than the latter. However, to say that Russia has run out of strategic options is to give its leaders a pass that they do not deserve.

Given its size and military, Russia is unlikely to be ignored altogether. In a Trumpian world where states pursue their raw interests without regard to others, Russia’s behavior may not seem so anomalous. At present, the country that was the chief architect of the world order appears to be busy dismantling it. Trump’s invitation for Russia to join his so-called Board of Peace may be peculiar, but it suggests that not all doors are shut and there is room for Russia to maneuver.

To paraphrase an old Chinese proverb, statecraft is like rowing a boat upstream: if you are not advancing, then you are retreating. Survival by muddling through is not a good option for a country or an industry that is changing as rapidly as energy. The sooner Russian leaders start rowing hard and avoid the boulders they themselves placed rather than letting their country drift, the sooner Russia can regain control of its own future. Not all policy pathways are closed, and the future is not preordained yet for the country and Russia’s energy sector. Ending the war in Ukraine, while the world is preoccupied by war in the Persian Gulf, would be a good start as it opens options not currently available to Russia.