To the countries of black gold… (Part 2): In Russia, oil and gas as weapons of a great power policy.

By Raphaël Rossignol, Doctor of Political and Economic Sciences at EHESS.

Essential to the way of life of our current societies, oil is at the heart of global geostrategic challenges. A valuable source of income and a decisive lever of influence for producer countries, it is, on the contrary, a vital resource to be secured for importing countries. A decoupling of supply and demand that explains the often frictional nature of the relationships governing the nations concerned.

In a series of articles focusing on three of the world’s greatest powers – the United States (the world’s largest producer of black gold), Russia (the world’s second largest exporter) and China (the world’s largest importer) – Resources discusses in detail the specificities of each and the associated geopolitical consequences, particularly for the African continent.

For a long time the Achilles heel of a USSR overly dependent on oil revenues, hydrocarbons are now a weapon that should enable Russia to once again become a leading power. Hence a reconfiguration of alliances accelerated since the Russian intervention in Syria and the American disengagement: rapprochement with Saudi Arabia around OPEC, dialogue with Turkey, industrial cooperation with China, support for Venezuela… Russia operates in all the theatres usually occupied by the United States, with the firm will to challenge American alliances in Eurasia through oil.
A leading oil powerhouse

Estimated at 80 billion barrels, its oil reserves place Russia between 7th and 8th in the world. This manna, which generates 30% of Russia’s GDP and 50% of the State budget, is not only a financial resource. Oil has long been an instrument of foreign policy. In the time of the USSR, it was used to partially feed the immense machine of subsidies to satellite countries, COMECON (Council of Mutual Economic Assistance or Council of Mutual Economic Assistance, an organization of economic mutual assistance between different communist countries), keeping prices low for the allies of the USSR relative to international prices. Conversely, the sustained decline in oil prices following the 1973 oil crisis had a significant impact on the Soviet economy, and demonstrated that the use of oil as a political weapon required great dexterity. 

After a cycle of nationalization of the oil industry during Vladimir Putin’s first term in office in the 2000s, Russia acquired oil companies (Rosneft, Gazprom Neft, Tatneft) and pipelines (Transneft) under state control, alongside private companies (Lukoil, Loukos) careful not to interfere with the Russian state’s external strategy. Sanctions imposed on Russia following the invasion of Crimea (2014) have increased state control over industry, thus depriving it of any possibility of continuing its partnerships with its foreign counterparts. 

Faced with the decline of Russian power in its former sphere of influence from the 1990s onwards; a decline that the colourful revolutions in Ukraine, Georgia and Central Asia have only accentuated, Russia, lacking sufficient foreign exchange reserves to use it effectively as a tool of influence, has decided to make oil the preferred instrument of its foreign policy. 

Hydrocarbons as a strategic lever

In the face of the Orange Revolution in Ukraine, Russian threats to cut gas exports to Europe showed the leverage they could provide to a continent that was entirely dependent on the outside world for its hydrocarbon supply. But the real event that led Russia to return decisively to the international scene was its support for Bashar Al-Assad’s Syria, on whose territory the last Russian base in the Middle East (Tartous) is located, and whose Mediterranean coasts contain a huge gas field (shared with Israel, Gaza, Cyprus and Lebanon). Russia has been present in Syria since the 2000s through Stroytransgas, the company headed by Gennady Tymoshenko, a relative of Putin, who completed the Jordan-Syria section of the Arab gas pipeline in 2008. Also worth mentioning is the construction of a gas power plant in Hayan, 30 km from Homs, whose production supported the regime despite the war. Russia’s support for Syria is explained by the fact that it is a pivotal element of Russia’s strategy in the Middle East and North Africa; not to mention its gas resources, which are particularly crucial in the context of the sanctions imposed on Russian companies. Sanctions imposed on Iran in response to its nuclear programme have deprived Syria of part of its oil imports, and Russia has filled this gap, becoming an important partner. The Russian intervention in Syria from 2015 onwards symbolises a strategic reorientation that translates into an increased role for OPEC afterward in order to better control prices, a gradual reallocation of Russian exports from Europe to Asia, as well as a renewal of alliances with Turkey to counter American influence in Europe. 

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