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Exxon, Shell, and BP Say They’re Leaving Russia. Hold Your Applause.

Putin’s oligarchy is built on oil and capitalism. Those same forces threaten democracy at home, too.

Vladimir Putin stands in front of an oil schematic while listening to another man talk.
Mikhail Klimentyev/TASS/Getty Images
Vladimir Putin attends a ceremony to open the Filanovsky oil field in 2016.

This week, ExxonMobil, Shell, and BP announced they would step back from their long-standing business helping pump the products that make up 40 percent of Russia’s federal budget. Exxon was the latest, announcing on Tuesday that it would exit the oil and gas production facilities in Far East Sakhalin that it manages with the state-backed firm Rosneft and end any future investments in the country, amid escalating sanctions following Russia’s invasion of Ukraine.

The oil majors’ declaration that they are pulling out of Russia for humanitarian reasons follows what, to those who’ve tracked these companies’ climate commitments and net-zero pledges, is now a familiar pattern. Exxon, for instance, has not announced a timeline for its withdrawal. The assets it’s allegedly abandoning are estimated to be valued at a rounding error ($4 billion) relative to the company’s gargantuan balance sheet. And any losses may be overwhelmed by the reputational benefits companies can collect by appearing to show brave solidarity with the Ukrainian people. “ExxonMobil supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation,” the company’s statement on the Russian wind-down began.

But companies that built their fortunes on colonial-era concessionary contracts have historically been agnostic at best about whether democracy and self-determination are good ideas. Shell and the ExxonMobil precursor Standard Oil, for instance, each had lucrative business in Nazi Germany, including with Zyklon-B manufacturer I.G. Farben. As James Marriott and Terry Macalister detail in their recent book, Crude Britannica, Shell “effectively divided into an Allied corporation and an Axis corporation” after the outbreak of World War II. As Marriott told OpenDemocracy last May, “Shell, and other corporations, adapted themselves to fit into the requirements of the National Socialist government.”

In the 1950s, BP’s U.K. state-backed predecessor, the Anglo Iranian Oil Company—accustomed to treating the Middle East as the British Empire’s gas station—played a role in pushing the CIA to overthrow Prime Minister Mohammad Mossadegh after he moved to bring his country’s oil under public ownership. Today, oil majors have few qualms about dealing with authoritarian regimes from Azerbaijan to Saudi Arabia. Domestically, fossil fuel companies’ continued, generous donations to Republicans hell-bent on gerrymandering, restricting voting rights, and overturning elections have long helped erode democracy, and fossil fuel money has thrown plenty of fuel onto the fire of white supremacy. As the Biden administration looks to target Russian oligarchs abroad, it might want to take a closer look at the corrosive influence of the ones in its own backyard.

As oil majors prepared to announce their courageous exit from Russia this week, the American Petroleum Institute—the influential oil and gas lobby group—was meanwhile arguing that it’s the White House’s patriotic duty to satisfy the industry’s long-standing demands to get the Keystone XL pipeline up and running and open public lands to more drilling. These artificial constraints on production, they and their GOP donees argue, are what’s causing gas prices to rise, threatening both global security and Americans’ pocketbooks.

This is such a strange line of reasoning that it’s hard to take it at face value. Given that oil and gas are global commodities—and the U.S. has very little control over how much companies drill—there’s no one-to-one relationship between what Biden says and how much people pay at the pump, at least unless he were to decide to impose price controls on oil (of the sort he floated on prescription drugs in his State of the Union address Tuesday evening). And there’s plenty of evidence that many drillers would like to keep prices high and are even deliberately curtailing production to do so—elevated prices are the only way to make fracking, for example, viable.

Methods that actually lower gas prices would be anathema to fossil fuel shareholders and executives. In response to record prices, the European Union, for instance, is planning to tax the profits oil and gas companies have made from recent price hikes and pour the revenue into renewable energy, as a means of reducing the EU’s dependency on Russian gas and fossil fuels overall. The U.K. Labour Party has proposed a one-time windfall tax on corporations operating in Britain’s North Sea oil fields, proceeds from which would help offset skyrocketing home heating prices.

Windfall taxes are a solid idea. But why not also get a bit flashier in targeting the foreign and homegrown oligarchs making life more expensive and less democratic? As Vice’s Edward Ongweso Jr. argues, Western companies have played a key role building the global network of shell companies and tax havens that have fueled Putin’s rise. Yachts, he notes, are one of several high-value assets that billionaires the world over use to hoard wealth offshore. “In Europe and the United States, everything is done to distinguish useful and serving Western ‘entrepreneurs’ from harmful and parasitic Russian, Chinese, Indian or African ‘oligarchs’. But the truth is that they have much in common,” economist Thomas Piketty, cited by Ongweso, wrote recently in Le Monde.

Stick it to Putin, then, by seizing every yacht (not just Russian billionaires’) and turning them into floating showcases of the world an energy transition can create—electrified, equitable, and a bit more fun. Dock them off the coast of key swing states like Florida and in any competitive coastal congressional district, inviting potential voters in for parties. Use a small portion of the revenue gained from a windfall tax on fossil fuel companies to enlist union shipbuilders and electricians to convert the boats to run on renewable energy. When it’s done, send those workers and their families—and a qualified captain, of course—off on a fully paid vacation on the craft they’ve helped retrofit with their own two hands. It’d be a kind of souped-up twenty-first-century dacha, taking the means of seafaring leisure away from fossil fuel–hungry billionaires and delivering it to the clean energy workforce of tomorrow.

This is unlikely, to say the least. Yet a rapid transition off fossil fuels constitutes an existential threat for both the Russian government and anti-democratic interests around the world. That’s not to say that inputs to decarbonization don’t themselves stem from very thorny supply chains that need to be heavily scrutinized. But getting the world off fossil fuels—including something on the order of a Global Green New Deal and public investments to safeguard all the nonoligarchs bound up in the fossil fuel economy as society adjusts—is core to ending the power structures that have led to Putin’s invasion of Ukraine, once and for all. Fossil fuels have helped build a cruel, violent, and unequal world. Decarbonization might be a chance to create a better one.