In mid-July, the Group of Eight industrialized countries, and Russia, will be meeting in St. Petersburg, in what Russian President Vladimir Putin will regard as recognition of his nation’s resurgent importance. Not surprisingly, a main agent of that importance is oil and gas, and Putin has proposed that “energy security” be an item on the agenda.
Oil is one very good reason why Russia has been accorded a seat with G8 members, though its economy is smaller than Holland’s. Meanwhile, the country with the second largest economy in the world, China, has been kept at arm’s length. That’s partly because the G8 likes to see itself as a grouping of wealthy democracies, and China, with its blending of capitalism and autocracy, has provoked discomfort in the industrialized club. Oddly, though, that same distaste has little affected their attitude toward Russia, where Putin has gradually suffocated independent voices in the media, in the business sector, and even in non-governmental organizations.
Oil, gas, and a little payback
In the Middle East, however, Russia has shown an admirable propensity to absorb capitalist culture, though paired with a hard-nosed policy little patient with advancing open societies. Not surprisingly, oil and gas form a cornerstone of Russian behavior, as does pleasure in striking back at the Americans and reviving old Soviet-era alliances.
As analyst Ilya Bourtman has written, “Learning from US policymakers who for many years developed relations with both Arab states and Israel and were thus at an advantage when it came to resolving disputes and capitalizing on economic opportunities, Russian officials now similarly avoid any ideological principle that would force their policy to be zero-sum.”
Take Russia’s relationship with Iran. Putin is in a win-win situation as the West seeks to head off the Iranian nuclear program. Months ago, before the United States agreed to participate directly in talks with its European partners, Putin was the go-to man to offer Tehran facilities to enrich uranium outside Iran – seen as preferable to allowing this inside the country. The Ahmadinejad administration said no, but that hardly diminished Russia’s importance as the United States, the United Kingdom and France continued depending on Russia and China to preserve Security Council unanimity. At the same time, Moscow and Beijing retained Iranian goodwill by rejecting sanctions.
Profit before politics
If war were to break out in the coming year, Russia would not complain. Not only is a conflict likely to push Iran closer to Russia, it might generate so much regional blowback that the Bush administration would face years of headaches because of Iranian retaliation. But most significantly, war would push the price of oil up to unheard-of levels, providing a windfall for Russian oil companies.
Oil has also been at the forefront of Russia policy toward Arab states such as Saudi Arabia, Iraq, Syria, and Jordan. It’s the promise of profits that has motivated Moscow, not at all the idea of using economics to democratize the Middle East. For example, the Russians voted in favor of Security Council Resolution 1559 demanding a Syrian withdrawal from Lebanon, but have since opposed sanctions against Damascus for failing to cooperate in the investigation of Rafik Hariri’s assassination. National interest has trumped the pursuit of justice as Moscow sees no reason to alienate Syria today, when Russian companies are involved in developing its gas sector.
It is hard to fault the russians for wanting to make money and throw deeper ideas to the wind
Oil has also played a role in Russia’s robust economic ties with Israel, another sign of how Russia has left ideology by the wayside. Direct bilateral trade stands at close to $1.5 billion, while the two countries have over $1 billion in energy deals. Bourtman writes that Russia provides 88% of Israeli crude oil, and in November 2005, “it was reported that the Blue Stream Natural Gas Pipeline – a $3.4 billion project between Russia and Turkey – would be expanded to Israel through the Eilat-Ashkelon pipeline to allow Russian and Azerbaijani oil and gas to be exported by tanker through the Red Sea to China and through the Suez Canal to Southern Europe.”
It is difficult to fault the Russians for wanting to make money while throwing deeper ideas to the wind. After all, isn’t that what the Americans spent the Cold War hoping they would do? But one still gets a sense that this attitude will only ensure that Middle Eastern despots continue to get a free ride.
