Russia’s energy prospects looked bleak just a few years ago. The European Union, Russia’s largest energy customer, was moving to distance itself from Moscow over the latter’s annexation of Crimea and support for Eastern Ukrainian separatists. Russia was trying to break into the Chinese energy market and meeting significant difficulties along the way. Finally, the U.S. shale revolution threatened to further undermine Russia’s place in the global oil markets.
This year’s Russian Energy Week forum in Moscow took place under considerably different circumstances. As foreign officials and business people descended on the Russian capital last week, the Kremlin had reason to be satisfied. Notwithstanding fervent opposition from Washington and several Eastern European countries, Russia is set to complete two new gas supply pipelines to Europe by the end of this year. Moscow is also expected to launch its long-awaited Power of Siberia gas pipeline to China before the start of 2020.
Some of Washington’s policies have inadvertently provided Moscow with new energy opportunities to expand its energy influence. Sanctions against Venezuela and Iran have weakened prominent Russian competitors in the oil market. Moreover, as the U.S.-China trade war continues to intensify, Beijing is increasingly looking to its northern neighbor as a reliable energy supplier.
In his speech at the forum, Russian president Vladimir Putin sought to both reassure and warn Moscow’s European gas clients. The Russian leader pledged that his country would continue to demonstrate “a responsible, businesslike approach in relations with our long-standing partners in Europe” regardless of the disagreements between Moscow and Brussels.
Putin, however, also railed against Europe’s “dirty tricks” against Russian gas companies and stated that Russia would look to sell its gas elsewhere if the continent continued to “keep energy hostage to political differences.”
“Naturally, we receive new impetuses to develop cooperation with those that do not support this logic—the logic of dishonest competition,” he said. “The demand for hydrocarbons is growing in Asia, more quickly than in Europe.”