Caspian Report - Issue: 08 - Fall 2014

RADU DUDAU
72
Russia, which depends on hydrocarbon
exports to Western Europe and
on Western foreign investments). 3
This is likely to fuel power politics
as applied by Russia in Mitteleuropa.
Moreover, considering that there is
no global but only regional market
for natural gas, where the pipeline
transit factor represents a hard security
element, Moscow’s energy
security policies regarding Central
and Eastern Europe (CEE) are much
more likely to be politicised.
According to the Foreign Policy
Concept of the Russian Federation
(2008), the CEE region is “the area
with the broadest geopolitical meaning
for the Russian Federation”. In its
relations with these countries, as a
state with greater geopolitical clout,
Russia has no particular motivation
to cooperate. The exception is the
circumstances in which CEE national
interests are aligned with those of
more significant players, such as the
EU, Germany or the US.
With regard to the transit states
(members of the Commonwealth
PRIOR TO THE DETERIORATION OF BILATERAL
RELATIONS, RUSSIA PARTICIPATED IN THE
STRUCTURED SECURITY DIALOGUE WITH THE EU.
of Independent States), Russia has
provided various benefits such as
low gas prices, bilateral trade, movement
of persons and employment,
military security arrangements, diplomatic
cooperation in international
forums. These amenities, however,
carry an implicit threat, namely
retaliatory measures in the event
those states do not remain within
Russia’s sphere of influence. Russia’s
strategy is to bypass them with
transport infrastructure, while time
keeping them in its political orbit.
While gas demand was high during
the pre-crisis market years, due to
the post-crisis consumption slump,
the economic and political power
has shifted toward the hydrocarbon
consuming countries. However, in
the long run, the energy interdependence
between the EU and Russia
will probably become more complex
and volatile.
As Russia is lagging behind when
it comes to economic diversification,
its only remaining foreign and
energy security policy asset is the
Realpolitik card; namely, to attempt
to establish a new regional and perhaps
even global energy order (including
in institutional forms, such
as BRICS, the Shanghai Cooperation
Organization and the Gas Exporting
Countries Forum, GECF), without
jeopardizing relations with the leading
European customers.
The complex dynamics of the Russia-EU
energy security relationship,
with areas of vulnerability within a
relatively limited geographic space,
have begun to strain Moscow’s political
relations with Brussels. Moreover,
the Ukraine crisis will further
propel energy policy and market integration
in the EU. Russia will find
it more and more difficult to employ
its usual divide et impera tactic. Indeed,
the best approach to depoliticise
energy trade is to build a liber-
3.
At present, approximately 50% of the natural gas exports to the EU cross the Ukraine, out of
which the highest share of end consumers is in Germany, France and Italy. The EU is Russia’s
most significant business partner. 75% of the direct foreign investments in Russia come from
the EU (the trade balance is inclined in Russia’s favour). However, while the Russian exports
to the EU only consist of natural resources, Russia’s range of exports to the EU is diversified,
meaning that Russia is more dependent on the EU than vice-versa. Moreover, in the event that
the EU’s energy demand from Russia decreases, Russia would find it difficult to compensate by
redirecting exports to Asia, a long term process with immense financial implications related to
the necessary marketing and transport infrastructure.