Gas, Trust, and Global Disasters

Wednesday, 16. March 2011     0 comment(s)
Vadim Kononenko
Researcher - The EU's Eastern Neighbourhood and Russia research programme

Russia’s response to global or regional-scale contingencies reflects the deep-seated link between diplomacy and economic considerations in its foreign policy, namely those pertaining to energy trade. Whether the significance of gas trade is so large that it determines Russia’s foreign policy or the range of diplomatic tools is so limited that Moscow mentions gas whenever it has to make a stance on an international issue, is a different question. It may well be that in the current world any crisis or major event that shakes regional stability has an immediate impact on energy prices or has other related repercussions, which in one way or another affects Russia’s interests as a major energy exporter.

Amidst the recent wave of revolutions in the Middle East, the Russian government stated that it would be ready to boost gas supplies to Europe should the oil supplies from the Middle East be interrupted because of the political and social instability there. The unrest in Libya coincided with the visit of Vladimir Putin to Brussels where Russia and the EU discussed the future of their gas trade and Russia’s proposals for the Roadmap on gas until 2050. Gazprom is obviously interested in securing long-term contracts for gas deliveries to the EU countries and the EU’s move towards a spot-price gas market as well as developing alternative routes for gas deliveries from Central Asia has not passed unnoticed. Moscow argued that if stability of gas deliveries is essential for the EU, then Russia is a more stable partner than the Middle East.

At the same time, just like the EU is seeking to diversify its gas imports, Russia is looking to expand its client base while reaching out to China and Japan. The recent nuclear accident in Japan prompted a statement from Prime Minister Putin that Russia would increase its liquefied gas (LNG) supplies to Japan as well as coal supplies and possibly electricity.

The energy repercussions of these dramatic episodes present an opportunity for Russia to expand its energy trade in but an interesting question arises, whether they will lead to a qualitative improvement of relationships with the neighbours? The key message that Moscow wanted to convey to Brussels at the recent energy talk was that trust should be restored between Russia and Europe. The same applies to the Russia-Japanese political relationship which has been rather tense in the past years over the issue of the Kurile islands. The increase in energy trade, caused by the unexpected external shocks, may not be sustainable to reverse the negative trends in relationships such the EU’s decision to decrease its dependency on supplies from Russia and Japan’s unease about the territorial issue. To do that, trust is indeed required, but in this matter gas trade is of little help.


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