“Weaponizing Energy: The Pandora’s Box Is Wide Open” – an expert commentary by Vitaly Ermakov for the Valdai Club
CCEIS expert Vitaly Ermakov gave a commentary to the Valdai International Discussion Club where analyzed the energy policy of Russia and Western countries. Key ideas:
-Energy trade has been the backbone of the overall economic relationship between Russia and the West, especially Europe, but now it appears that this era is ending;
-Amid the uncertainty about who will pay for the restoration of Ukraine, the plans to confiscate Russia’s export earnings have emerged;
-An import tariff on the Russian energy export and schemes with escrow accounts in Western banks are among those plans;
-The EU introduces and considers additional tough measures to reduce Russia's energy exports: an embargo on Russian coal supplies is already in place from August 10, 2022, an oil embargo is being discussed, and plans are being worked out to phase out Russian gas;
-Due to the inelasticity of supply and demand in the energy markets, the interdependence of Russia and Europe cannot be eliminated by directives;
-The introduction of the “gas for rubles” scheme by Russia was a pragmatic response to attempts to control export revenues from the EU, the rejection of this scheme by PGNiG and Bulgargaz has already led to a halt in direct gas supplies to Poland and Bulgaria;
-The discussed oil embargo against Russia or problems with the "gas for rubles" scheme could trigger a series of extreme disasters, politicians are raising the stakes in an energy game that could get out of hand
CCEIS took the 2nd place in the “TOP-20 scientific and expert departments of the National Research University Higher School of Economics according to MediaIndex”.
«Russia and China Expand Their Gas Relationship: Causes and Implications» - V. Ermakov's article for the Valdai International Discussion Club
V. Ermakov, a CCEIS expert, analyzed the prospects for the development of Russian-Chinese cooperation in the gas sector in an article for the Valdai International discussion club.Main points:
·In the new reality Europe is going to reduce its energy dependence on Russia as soon as possible and regardless of collateral damage;
·Russia must accelerate its Pivot to the East, which makes China a clear winner since it would be able to use the situation to get Russian oil and gas at discounted prices;
·In order to diversify their foreign trade options Moscow and Beijing have accepted a package of commercial contracts for the supply of Russian oil and gas;
·China’s gas consumption is growing, and according to estimates, its own production by 2030 will be able to cover only half of the future increase in demand. That is why the deal now is more relevant than ever.
·Gas supplies via the Power of Siberia gas pipeline with the addition of gas from the Russian Far East will give Gazprom a competitive edge compared with other importers in the northern and eastern provinces of China.
·Russia and China continue to negotiate a new giant contract on gas supplies from Yamal, and both sides have demonstrated a pragmatic acceptance of a possibility to include third-party transit (via Mongolia) into their plans.
«Russian Gas Exports to Europe: In the Eye of the Storm» - the new article by V. Ermakov for the Valdai Club
V. Yermakov, an expert at CCEIS, wrote an article for the Valdai International Discussion Club on Russian gas supplies to Europe amid the crisis. Key ideas:
• Despite the fighting in Ukraine and an avalanche of Western sanctions, Russia continues to supply gas to Europe without interruptions;
• After a decline in January, gas supplies to Europe from Russia returned to their previous level in February and even increased in the first ten days of March;
• Gas transit through Ukraine was not disrupted even by fightings;• Over the past two years, the European gas market has gone from a supply surplus to a crisis caused by supply constraints (exacerbated by events in Ukraine), driving up prices;
• For over 50 years, Russia-Europe gas relationship has been underpinned by the concept of cooperatively managed interdependence producing mutual benefits, but it cannot remain immune to the increasing geopolitical animosity between the great powers and the emergence of extreme bargaining positions;
• Gazprom's existing production capacity is sufficient to meet the company's obligations under long-term export contracts and cover seasonal peak in domestic demand, but investment in new capacity is required to meet additional new demand;
• Prior to the start of the special operation, Gazprom took a wait-and-see attitude, making it clear that without guarantees of demand there would be no major investments;
• There is a reorientation of gas supplies to Asian markets, and the launch of a special operation reinforces the need for a “pivot to the East”
"Russia uses the tension around Ukraine as a diplomatic tool" - Dmitry Suslov's interview with Fox News (02.15.2022)
Dmitry Suslov, Deputy Director of the CCEIS, analyzed Russia's policy in the context of the escalation of the Russian-Ukrainian crisis in an interview for Fox News. Key ideas:
-The mood in Moscow absolutely does not correspond to the image of the capital of a country preparing for a large-scale military invasion.
-Russia uses the demonstration of military power as a tool to achieve its goals through diplomacy.
-If Ukraine decentralizes, as required by the Minsk agreements, it will be more difficult for Kyiv to join Western unions since Ukrainian nationalism will be opposed by the population of Russian-speaking regions.
-Russia is not interested in de-escalating until its security guarantee demands on NATO are accepted.
Vitaly Yermakov discusses Russia’s Arctic strategy and the Northern Sea Route in a podcast with the The Straits Times (11.02.2022)
1. Russia considers the NSR a strategic economic priority since it is instrumental for suppling Russian northern territories. Its importance has grown in the past few years with the expansion of Russia’s oil and gas projects in the Arctic. The NSR allows to monetize vast oil and gas resources located near the coastline and transport them economically to target markets.
2. The realistic possibilities for the NSR to develop into a major trade artery to Asia. The NSR is an Arctic shortcut that saves time and reduces transportation costs on a route between Europe and Asia. But it is necessary to take into account that navigation in Arctic seas is still difficult and it could cause significant risks for ships. Russia is trying to increase its Arctic capabilities by building a new generation of powerful nuclear icebreakers and Arctic class ice-resistant tankers. Initially, Russian exports of oil, condensate, and LNG are going to represent the lion’s share of the transportation turnover via the NSR. When year-round navigation via the NSR becomes a reality, international transit might increase as well.
3. The NSR and its geopolitical implications. In a world of increasing global rivalries, Russia’s control over a major trade route connecting Europe and Asia is an asset. Unlike other marine routes to Asia that could be controlled by the US Navy, the NSR emerges as an important factor in the Russia-China relationship.
A. S. Pyatachkova commented to Bloomberg on the upcoming meeting between Vladimir Putin and Xi Jinping (03.02.2022)
Deputy Head of the CCEIS Asia-Pacific Sector A. S. Pyatachkova commented in Bloomberg on the state of Russian-Chinese relations on the eve of the meeting between Russian President Vladimir Putin and Chinese President Xi Jinping. Key points:
- Cooperation between Moscow and Beijing is a strategic challenge for the Joe Biden administration;
-The aggravation of relations with the West encourages Russia to speed up cooperation with China, especially in the technological sphere, which is subject to sanctions pressure;
-Too much emphasis on economic relations with China could risk relegating Russia to the status of an energy and raw materials supplier to a much stronger partner;
-The imbalance of economic power could cause difficulties in bilateral relations if China refuses to perceive Russia as a partner with a special status and tries to put pressure on it.
Egor Prokhin presented a report at the International Conference "E-Education, E-business, E-Management, E-Learning" in Japan.
Egor Prokhin, a research fellow of the CCEIS, presented a report titled “The role of technological platforms in the innovative development of Industrial enterprises" on January 17, at the 13th international conference "E-Education, E-business, E-Management, E-Learning", held at Waseda University in Tokyo.
Within the report’s framework, the results of the analysis of the experience of the main trends in the innovative development of industry in the Asia-Pacific countries were presented, and the economic and managerial effectiveness of new development models was assessed.
«Pandemic Diplomacy: China’s Role in Central Asia in the Era of Covid-19» –Miras Zhiyenbayev for the Oxus Society for Central Asian Affairs.
Miras Zhiyenbayev, CCEIS Fellow, wrote an article on aspects of Chinese pandemic diplomacy and competition between Russia and China for influence in Central Asia for the Oxus Society for Central Asian Affairs. Key ideas:
- The global pandemic has exacerbated the economic and political problems of the Central Asia states. The situation in Central Asia provides opportunities for both China and Russia to consolidate their influence over the foreign and domestic policies of Central Asian countries.
- The economic strength of China provides the opportunity for China to use investments of private Chinese firms to establish cooperation with Central Asian governments through international organizations such as the SCO.
- Another opportunity afforded to China is the shift towards internal aspects of the national security caused by the pandemic. Some Central Asian governments are interested in Chinese surveillance technologies. The CA countries will have to continue to buy from China, without the ability to control their own technologies and develop their own rules.
- While the prospects of the economic dependence of CA countries from China are becoming ever more real, the existing cultural tensions will be the source of social instability. Russia still exerts huge amount of “soft power”, which allows to Russian government to use media to denigrate China’s activities in the region.
HSE University, Harvard University, and other partner organizations have completed the Second Boot Camp of the Arms Control Negotiation Academy (ACONA)
Lev Sokolshchik, an Associate Professor of the School of International Regional Studies, and a Research Fellow at the Centre for Comprehensive European and International Studies (CCEIS) took part in the second ACONA Boot Camp (January 10-14, 2022) as a member of the organizing team and a supervisor of the international research group focused on the prospects for concluding a new arms control treaty. The activities at the camp included a series of presentations of the scientific projects' results of the ACONA fellows, discussions with the world’s leading experts in the fields of international relations and arms control, master classes, and exercises to develop negotiation skills.