How Your Retirement Fund May Be Supporting Russia’s War in Ukraine

March 1, 2022
Shlomo Bernartzi

ExxonMobil CEO Rex Tillerson and Russian dictator Vladimir Putin in 2011 at the signing of Exxon's deal to develop remote Russian oil fields. Photo credit: Alexey Druzhinin for APP/Getty Images.

Vladimir Putin shocked the world on Thursday when he ordered Russian troops to carry out a nation-wide attack on Ukraine. Why did Russia invade Ukraine? How did we end up here, and why couldn’t Western powers prevent him from starting this war? What do high crude oil prices have to do with it? And what can I do to help Ukraine? To find answers, follow the money.

Why did Russia invade Ukraine? How is it related to fossil fuels? And why have crude oil prices spiked?

Oil and gas play two key roles in the Russian invasion of Ukraine: (1) they finance the war effort, and (2) they thwart the West’s ability to use all diplomatic measures available to prevent the invasion.

Russia is a country that is rich in oil and natural gas (sometimes more accurately named fossil gas). It produces one in every ten barrels of crude oil worldwide, and it earned $240 billion from fossil fuel exports in 2021 alone, accounting for 36% of its national budget. Russia’s position as a world power is in no small part made possible by the revenue it earns from selling fossil fuels. It would not be able to finance its invasion of Ukraine in the same way without this revenue.

Crude oil prices have spiked because markets have been pricing in the risk that government sanctions could prevent the significant portion of global oil and gas that Russia supplies from reaching global markets.

But the truth is, Western countries have not fully leveraged the power of sanctions, which can be a key tool of diplomacy. The purpose of the sanctions Biden announced on Thursday is to hurt Putin’s ability to raise money and access technology that would aid its war effort. While Biden announced sanctions targeting the banking sector, specific Russian oligarchs, and high-tech imports to Russia, he did not restrict Russian sales of oil and gas. Europe and the US use Russian oil and fossil gas for transportation, electricity generation, and to heat homes and buildings. Restricting those imports would make the prices of oil and gas skyrocket, putting US and European citizens at risk of not being able to afford to drive cars or heat their homes. This reality means that Putin has been able to invade Ukraine with minimal consequences. He took a bet that the West would continue to buy Russian oil and gas regardless of his military action, so he would continue to be able to finance his war. 

While Europe and the US have not cut off existing shipments of Russian fuels, Germany has halted the certification process of the Nord Stream 2 gas pipeline, which has been built to double the amount of gas supplied from Russia to Germany, and has been sitting idle while awaiting approval from Germany and the European Union. This is a good first step. 

Rather than relying on fossil gas to heat homes, Europe and the US could be investing in infrastructure to electrify homes - converting existing homes and planning for new homes to use electricity instead of gas for heat, hot water, and cooking. The technology that enables this transition exists today, and our governments could invest in speeding up that transition rather than doubling down on fossil fuels that finance the aggression of dictators like Putin. 

Are US oil companies to blame?

US oil company ExxonMobil signed a multi-billion dollar deal with Russian oil giant Rosneft in 2011 to develop notoriously-elusive Russian oil resources, leading Putin to award ExxonMobil CEO Rex Tillerson the Order of Friendship, one of the highest honors Russia gives to foreign citizens. In helping Russia access its remote fossil fuel reserves, Exxon dramatically increased the revenue that Russian companies collect from fossil fuel exports. 

Reducing our economy’s reliance on fossil fuels is one way to prevent dictators like Vladimir Putin from gaining outsized power. The Build Back Better Act would allocate $555 billion to combat climate change, including billions for homeowners to replace gas-fired furnaces and appliances with electric versions. 

But companies like ExxonMobil have actively lobbied against common-sense policies that would ease our economy’s transition away from fossil fuels. An ExxonMobil lobbyist was caught on tape bragging about having Democratic Senator Joe Manchin in his pocket - and Manchin has indeed blocked progress on the climate provisions of the Build Back Better act, despite coal miners unions asking him to support the bill.

As long as we rely on oil and gas to heat our homes and fuel our cars, we will be empowering brutal dictators like Putin and enabling their aggression towards innocent people. Transitioning to renewables puts power back in our own hands, and also happens to save the planet.

How can I help Ukraine?

One way to help Ukraine is to stop investing your money in US oil companies like ExxonMobil. You may be investing in them without even realizing it. 

Passive index funds that invest in a wide swath of the economy have increased in popularity over the past few decades, and this has resulted in many people investing by default in companies that they would prefer not to be associated with upon closer examination. This can be especially true in retirement savings, where investors often do not have many choices available to them, and those that are available are typically diversified across the economy and include fossil fuels.

At Sphere we help you avoid investing in fossil fuel companies with an index fund that tracks the top 500 US companies minus the fossil fuel companies in that list, which make up about 40 of the top 500 names. 

While an S&P 500 index fund is about 5% invested in fossil fuel companies, the Sphere fund (SPFFX) has zero exposure to fossil fuels. This gives regular investors the ability to avoid investing in the biggest polluters in the world, a move that major investors such as the Harvard endowment and the New York State pension fund have already made. 

If your primary way of investing is via your company’s 401(k) plan, you can take a look at our email template for an example of how to ask your benefits manager to add a fossil-free option to your lineup. If you invest outside of an employer-sponsored retirement plan, you can invest directly in SPFFX. Don’t hesitate to reach out with any questions at

Taking your investment dollars away from oil and gas companies that are helping to finance Putin’s aggression towards Ukraine is a powerful way to send a message to both ExxonMobil and Russia that you stand with Ukraine, and to hit Putin where it hurts: his pocketbook. Because money talks. Make it shout for the planet.