“A new chapter in the history of international politics has begun,

one in which the pursuit and control of energy resources would

be the central dynamic of world affairs, and governments.”

(Guay, 2014)

(Michael T. Klare)

 

In the study of foreign policy there are variety of approaches, each explaining its essence, functions goals and objectives. Through its foreign policy, state pursues objectives such as national security, economic and political growth of the state, creating a positive image of the country among other countries of the world community. Foreign policy of state encompasses set of actions aimed at establishing and maintaining relations with the international community, protection of own interests and expansion of its influence on the other actors of international politics. One important dimension of foreign policy in the international arena is external energy policy in which government can use its resources to achieve foreign policy goals. 

Following the 1970s oil shocks, energy security became a primary concern in international relations, however important role of energy resources particularly, of oil had amplified during World War I. Importance of oil products has continued to grow during post-war period, since most of the developed nations have been using oil products in distinct industries including food production, transportation, heating, manufacturing, and electricity generation (Cherp & Jewel, 2011). Not all the nations possess energy resources, therefore, some have to import them which in turn increases production and speeds up resource depletion, concurrently others enjoy having abundant resources and become exporters in energy market. Later exporter states’ economy becomes increasingly dependent on oil industry. Unfortunately, energy resources tend to end which consequently produces global energy problems. Therefore, providing effective, sustainable and environmentally-friendly energy supply at affordable prices has become a fundamental principle of energy market that constitutes a challenge to each and every state and the entire global community. 

Disposing of huge amounts of fuel affected foreign policies of resource rich countries, especially towards the states that are dependent on energy import, so they began to use this petro-power for the purposes of imposing economic sanctions, punishing their enemies and rewarding their allies. One of the key actors in the contemporary energy market is Russia. After a noticeable decline in the Russian influence in the world stage, the Putin era has been regarded as a revival of Russian power. One of the key factors in this revival is Russia’s ability to use its oil and gas resources as a foreign policy tool. Russia has been strengthening its petro-power in two ways: first, using resources to reward allies; second, using oil and gas to penalise states which challenge Russian position in the world stage. The purpose of this research is to conduct a complex analysis of the history of Russian energy diplomacy in the 21st century and its impact on the formation of foreign policy. 

 

“Petro-Power” is back

Russia occupies one of the top places in the list of the world’s largest hydrocarbon resource holders, producers and exporters with almost 6 percent of world’s proven oil reserves, 13 percent of global oil production, 12 percent of world’s oil export, 17 percent of global gas reserves, and 16 percent of global gas production (BP, 2015). It is a major oil and gas supplier both for the European Union and CIS countries and enjoys considerable influence over the both markets. Obviously, energy plays an important role in the Russian foreign policy towards its strategic allies and enemies, creating a further opportunity for Russia to shape key political decisions within these states as well as the regions concerned. To keep its influence over its allies, Russia utilizes various incentives and tools within its energy policy, such as subsidizing prices and building energy routes. One of the best historical examples would be Ukraine during the presidency of Kuchma who had been ruling the country in 1994-2005 and was pursuing a pro-Russian foreign policy. Throughout his reign, Russia exported gas to Ukraine at a stable cheap price, $50 per thousand cubic meters along with given supplies to Ukraine by Russia as a transit fee. The similar scenario could be observed in Belarus since Belarus in 2006 was paying $47 per TCM while Russia was selling its gas to Europe at the price of $230 per TCM (Newnham, 2011). Besides the ally states, Russia also supported politically sensitive territories such as Trans-Dniester Republic, Abkhazia, and South Ossetia through its energy policy by building infrastructures which played crucial roles in the economy of these areas. 

Along with maintaining Russian influence over these states Russia also tries to gain control over the region, which is crystal clear in the case of Turkey. Turkey holds a very important geostrategic position thanks to the Dardanelle and Bosporus straits which pave the way to Europe and connects it with the Central Asia and Caucasus regions. Consequently, Turkey remains one of the key players for Russia due to its location and access to the Western market. One of the clear examples of Russia’s effort to control Turkey as well as the region could be observed in the case of the Turkish Stream project. Turkish Stream is a naturalgas pipeline planned to be built under the Black Sea by the end of 2019 and aiming to diversify Russia’s import route to Europe by bypassing Ukraine (Mazneva, Kravchenko, & Gilblom, 2016). Building Turkish Stream will give Russia more control over the pipelines supplying the Western states with energy resources and will help Russia to diversify its export routes.Based on the 2015 data, Russian gas constitutes a55.6%shareof imported natural gas in Turkey which means that the launching of Turkish Stream will increase its energy dependence on Russia tremendously that will further privilege Russia in terms of intervention into Turkish domestic affairs (Republic of Turkey Ministry of Foreign Affairs). In this regard, we can conclude that since Turkey is one of the checkpoints in the region, gaining the control of Turkey mean to gain more power over the region. 

Despitethe incentives Russia sends to its allies, it is also clear that Russia has for most of the time preferred to use energy to punish as well to enforce pressure on these states. The best scenario might be shown in the light of Ukraine since, as mentioned above, as a Russian ally Ukraine received unambiguous benefits. If we look at the main root of the dispute, we will see that the main reason was the shift towards apro-Western attitude on behalf of Ukraine at that time which angered Moscow resulting in the deterioration of the relationship between these parties. There is almost the same historical scenario with Belarus as well since, despite the fact that Belarus was Russia’s closest ally, Russia used energy many times for pressuring the Belarus’ government. For instance, in 1994 the first energy dispute between the closest allies over unpaid debts occurred due to the Russian ambition to gain control over the Belarus main gas transmission network via integrating Beltransgaz into Gazprom; however, the Belarusian parliament strictly opposed in terms of energy, and the energy dispute of 2009 between the two actors had put a question mark over this idea since it meant a huge control of Russia over Belarus. Gazprom ceased its pressure on Belarus for overdue gas debts only after Belarus and Russia agreed to establish a monetary union and Belarus stopped charging Russian troops located in the territory of Belarus. However, the issue of unpaid debts was raised many times between these two states throughout their relationship, and Russia many times threatened Belarus with cutting off thegas supply (Varol, 2013). The recent transformation in the Belarus’ position towards a more pro-Western attitude as well as its existing debt on gas payments to Russia demonstrates that the situations are projected to be worse and the alliance is about to approach to an end. We can relate it to the case of Turkey as well since in 2015 due to the political conflict between Russia and Turkey caused by the downing of a Russian warplane by the Turkish forces, Russia increased gas prices for Turkey, provoking a respective dispute between two states (Daily News, 2015). 

Russia can easily impose painful sanctions on small and economically weak neighbours. In comparison with other huge energy markets, Baltic states and Georgia is rather small and cutting off their energy supplies costs almost nothing for Russia. Moreover, these states have less control over the energy routes from Russia to other regions, thus Russia enjoys its petro-power over these countries more openly. In 2004, when pro-Western Mikheil Saakashvili came to power, Russia soon began to challenge Georgia’s gas supplies. Moscow forced Georgia to agree with immense price hikes, from about $63 per TCM in 2005 to $110 in 2006 (Newnham, 2011). 

Energy resources play an even greater role in the relations between Russia and the European Union. The problems with reliable energy supply of the EU member states have been accumulating since the beginning of the 21st century, occupying one of the priority places in the integration policies. Two major reasons need to be mentioned here: first, the resource base of the planet is depleted, as energy consumption increases every year, requiring new search for alternative ways of producing it; second, due to the politicization of energy security, there was a threat of using the energy factor to achieve political goals, which actualized this problem for the European Union during the conflicts over hydrocarbon supplies between the Russian Federation and the transit states- Ukraine and Belarus. Even though the suspension of pumping oil and natural gas did not target EU directly, its members concluded that it was necessary to develop a set of measures at the supranational level to prevent similar situations arising in the future. 

The EU is the biggest trade partner of Russia with 48 percent share in Russia’s foreign trade, while Russia ranks EU’s third trading partner with 8.4 percent of total trade (Szczepański, 2015). 74.9 percent of total exported goods from Russia to the EU are mineral fuels which considerably contributes Russian trade surplus. However, to decrease itsdependence on Russia the EU is seeking for alternative sources, while Russia is planning to build new routes to Europe bypassing Ukraine (e.g. Turkish Stream). Although relations between the EU and Russia over the energy issues have been influenced by the annexation of Crimea, energy relations between them had been deteriorated even before the crisis. The implementation of the Thirds Energy Package in the EU warned a break of long-standing, contractual relationships, since they ended bundled business models, as well as introduced the revision of long-lasting contracts (Gusev & Westphal , 2015).Political dispute over Ukraine is hindering the EU and Russia from achieving consensus on controversial issues. 

 

Conclusion

Russian energy power – an effective tool for its foreign policy?Findings of the research show that Russia’s increasing role as a petro-power can easily threaten to all the states importing Russian energy resources. However, this threat can be felt much more in economically weak and small states. Since Russian energy policy is purely based on a carrot and stick approach, we can easily conclude that none of the energy alliances mentioned above are for a long-term and taken for granted. Taking into account that the energy is an unalienable part of Russian foreign policy, we can conclude that based on the realist approach Russia will always act according to its own interests and will try to gain control over these states through various tools. Since Russia’s main interest is to maintain its control over the region, it will do its best to achieve this goal, even though these policies may come at the cost of deterioration in the relationships with its allies, so the relationship of Russia with its allies are mostly politically motivated rather than purely economy-driven.In this regard, Russia will use its main tool, energy for pressuring over its allies as well as will grant incentive and privileges for praising the ones which acted in accordance with Russian foreign interest. It is also worth noting that possession of energy as a supplier gives Russia more global leverage for solving the disputes in terms of their own interests and most of the time makes its allies be the party who is compromising. 

 

 

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