Flynt Leverett: Russia’s New Petro Power Politics


I have just returned from a trip to Moscow, for speaking engagements and meetings with officials, academic and think tank experts, and energy executives about the intersection of Russian energy strategy and Russian foreign policy. Upon my return, I also had the pleasant experience of seeing the first hard copies of an article that a French colleague and I have just published in the Summer 2006 issue of The National Interest. Titled “The New Axis of Oil“, the article argues that the political consequences of recent structural shifts in global energy markets are posing the most profound challenge to American hegemony since the end of the Cold War:

The increasing control that state-owned companies exercise over the world’s reserves of crude oil and natural gas is, under current market conditions, enabling some energy exporters to act with escalating boldness against U.S. interests and policies. Perhaps the most immediate example is Venezuela’s efforts to undermine U.S. influence in Latin America. The most strategically significant, though, is Russia’s willingness to use its newfound external leverage to counteract what Moscow considers an unacceptable level of U.S. infringement on its interests. At the same time, rising Asian states, especially China, are seeking to address their perceived energy vulnerability through state-orchestrated strategies to ‘secure’ access to hydrocarbon resources around the world. In the Chinese case, a statist approach to managing external energy relationships is increasingly pitting China against the United States in a competition for influence in the Middle East, Central Asia, and oil-producing parts of Africa… While each of these developments is challenging to U.S. interests, the various threads of petropolitics are now coming together in an emerging “axis of oil” that is acting as a counterweight to American hegemony on a widening range of issues. At the center of this undeclared but increasingly assertive axis is a growing geopolitical partnership between Russia (a major energy producer) and China (the paradigmatic rising consumer) against what both perceive as excessive U.S. unilateralism.

I return from Moscow even more persuaded of the validity of this analytic argument — with regard to Russia, China, and the prospects for increasing Sino-Russian strategic collaboration. Beyond the article, I’d like to offer some additional observations about Russia’s rise as what some describe as an “energy superpower.”

For all of the inefficiencies and conflicting interests and parochial consideration at play in Russian decision-making, the Kremlin under Vladimir Putin is developing a model for deriving external leverage from Russia’s status as a major energy exporter that is in some ways distinct from previous models followed by other major energy suppliers (i.e., Saudi Arabia). This unique Russian model has implications for U.S. interests in a variety of arenas; unfortunately, U.S. policy does not yet reflect a serious strategy for dealing constructively with these challenges.
To illustrate these points, I will table the example of Moscow’s use of investment capital (derived from energy export revenues) and control over access to Russia’s state-owned pipeline system to assume a leading role in the development and marketing of neighboring states’ energy resources. This has been an underappreciated (at least in the United States) but critical part of Russia’s largely successful strategy during the last 2-3 years to roll back U.S. influence in the Eurasian south and reestablish a Russian sphere of influence there. (This approach may also be used to give Russia an important role in developing Iran’s hydrocarbon resources, particularly the Islamic Republic’s enormous potential as a gas exporter, but that is another story.)
The U.S. response has been to intensify longstanding American support for the development of energy export routes from Central Asia and the Caucasus that would be outside Russian control. Russians clearly view this as a deliberate U.S. provocation. As someone who spent most of his career in government service working on the Middle East, I grew accustomed to charges of a “double standard” in U.S. foreign policy, referring to American support for Israel. But Russians now talk about a new “double standard” in U.S. policy — one that criticizes deviations from Western standards of democratic practice in Russia but is silent on authoritarian abuses in Azerbaijan or Kazakhstan. From a Russian perspective, the new double standard reflects a deliberate U.S. effort to isolate and weaken Russia; increasingly, Moscow has the resources and wherewithal to push pack.
If there were a serious prospect of “beating” the Russians in a contest for influence in Central Asia and the Caucasus, the U.S. approach might have a serious strategic rationale. But, the reality is that, even if all the projected non-Russian pipelines out of these areas are built, in 10 years, the percentage of oil and gas exports from states like Kazakhstan and Azerbaijan that will reach foreign markets through Russian-controlled infrastructure will still be staggeringly high. The real policy question is how to engage Moscow so that its inexorably growing influence in critical regions like Central Asia is not turned against U.S. interests, rather than the development of quixotic strategies for seeking to undermine that influence. But that is a policy debate we are not really having.
Managing the many facets of U.S.-Russian relations as Russia’s importance as an energy supplier continues to develop will be a long-term strategic challenge for successive U.S. administrations. The United States will face similar long-term challenges managing the impact of rising energy demand in China and India and the statist strategies that these countries are following as they seek to meet their energy needs, and dealing with major energy producers in the Middle East in a way that encourages these states to expand their own productive capacity. Energy security, in all its aspects, will be, in my view, perhaps the most strategically important foreign policy issue during the next 10-20 years. I am preparing to leave my current position at Brookings and move to the New America Foundation, where I will be senior fellow and director of a new project on the geopolitics and geoeconomics of energy security. From this position, I hope to contribute to a more rigorous and comprehensive debate about energy security as a foreign policy issue. And, I hope to contribute occasionally to this very fine blog. Flynt Leverett
Flynt Leverett will take up his new appointment at the New America Foundation July 1; he has also been appointed visiting professor of political science at the Massachusetts Institute of Technology. He was senior director for Middle East affairs at the National Security Council in 2002-03; prior to that, he served on the Secretary of State’s Policy Planning Staff and as a senior fanalyst at the Central Intelligence Agency.


4 comments on “Flynt Leverett: Russia’s New Petro Power Politics

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  2. David Habakkuk says:

    And there used to be a great number of Russians who liked America so much! And it would probably be somewhat helpful in terms of American energy security if there still were!
    Certainly the kind of debate Flynt Leverett wants would be very much to the point. A useful strand in it, however, might be reflection on the degree of antagonism American policy has caused among Russians, including many who were once among the most fervent admirers of the United States.
    Some comments from the erstwhile democracy activist Sergei Roy in one of Peter Lavelle’s Untimely Thoughts symposia may be helpful.
    “ … I would refer to the mood of the majority of the people — and leaders — of Russia at the time of the collapse of the Soviet Union. Having taken a modest part in those events, I distinctly remember that mood: we Russians would throw off the Communist yoke; the division of the world into two hostile camps, ever on the brink of suicidal war, would be done away with, and grateful humanity would welcome new Russia as an equal member of a friendly family of nations (remember Gorbachev’s pipe dream of a Common European Home?). There were sober voices warning that the overthrow of Communism was but a side issue, and that the West’s main target was Russia as such, not any particular political system in Russia. It did not take long for the truth of those warnings to become obvious even to the most obtuse: far from being accepted in the Common Home, Russia had its face thoroughly rubbed in the dung of defeat. Promises about never expanding NATO toward Russia’s borders were forgotten, but who cared? The Kremlin, ably assisted by a host of thieving Western advisers of the Shleifer-Hay type, was then busy plundering the country through the scam of the century billed as privatization, while the people were too preoccupied with physical survival — but do you think they have forgotten whose doing it all was? Where all the advisers came from, and in what direction all the stolen money flowed away? Sure, the people hate the native thieves, but their feelings towards recipients of stolen goods are not too hard to divine, either — and they are all in the West.
    “What is said to have come to Russia from the West was market economy, freedom and democracy; what the Russian people have experienced at first hand, often very painfully or fatally, was social injustice, impoverishment, crime, corruption, collapse of the country as they had known it all their lives, persecution and killings of their relatives in the “near abroad,” repeated robbery of their savings on a national scale, destruction of the health system, incredible decline in moral standards attributed to the Western, TV-propagated cult of personal gain at all costs, and a host of other ills.
    “Beyond the shrunken borders of their country, they could see Western ideas of freedom and democracy being inculcated in, say, Serbia with a liberal application of Tomahawks, B-2s, and F-117As. These were complemented with the latest political gadget to come from US political think-tanks — color revolutions (although the first one in Serbia did not yet go by that name). But the general idea was pretty clear, after that little episode: the US was ready to resort to open aggression to protect its “vital interests” — which by that time included, we were told, practically any spot on the globe, not excepting areas that a few years earlier had been parts of Russia; even the territory of Russia itself was not exempt from the shrewd planning of geostrategists like Zbigniew Brzezinsky. No, I would not talk of Russia’s “reasons to cool relations with the US.” The Russians’ attitude toward this kind of policies and plans was, and is, anything but cool.”


  3. atheaaa says:

    i like russia so much….


  4. rapier says:

    The US is never going to meet its needs for oil by military means. At some level that was the intent of the Iraqi adventure. I suppose the same might be said of the developing Iranian situation as well but even the stupidest Mayberry Machiavelli must now understand that attacking Iran gurantees years and years of energy supply and cost chaos. The very antithesis of security.
    The answer to reliable energy supplies lies in markets of course. Oil is fungable. When markets operate freely, freely in nominal terms such as the oil market does today, the concept of control of oil is an exercise in semantics. Pay the market price and the oil comes to you. It’s a damn shame Texans don’t own all that oil anymore but so it goes. They ain’t ever going to ‘control’ that oil so forgetaboutit. The biggest if not the only threat to the operation of the ‘free’ market in oil is war.
    While overt hostility up to and including war with China or Russia could arise from matters not directly related to oil that could throw the door shut on the ‘free’ market without doubt the biggest threat of such conflict lies precicely with our military presence in oil producing regions. All in all a situation rich with irony.


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