Russia, spurned by China, lashes out at Europe

In the wake of the SCO’s (China’s regional club’s) humiliating refusal to back Russia (hat-tip to Dan Nexon), Russia responded to its growing international isolation by reducing the flow of energy to Europe.

Russia’s government may prompt at least one oil company to cut supplies of crude oil to Europe in response to the threats to impose sanctions in the wake of the conflict with Georgia.

It is rumored that supplies via Druzhba pipeline that meets oil requirements of Poland and Germany will be probably reduced and that the LUKOIL leadership has been given the notice.

The reduction might happen already starting from September 1, the sources speculate. People in LUKOIL, however, say they know nothing about the plans to cut down supplies, and people in the Kremlin declined to comment.

Russia to Cut Oil Supplies to Europe In Response to Sanctions – Kommersant Moscow.

Two other news pieces for context: China has a new oil deal with Iraq, and even Sudan has refused to South Ossetia and Abkhazia.

The simplistic analysis is that Putin’s bumbling is just continuing, with his historical uniting of Serbia and Kosovo in condemnation of Russian attempt to redraw borders now leading to the genocidiers of Sudan in taking an anti-Russian line!

A better analysis goes back to the Core/Gap divide: Russia, like Sudan but unlike China, is a gap state.  It creates no wealth, but provides energy that makes it easier for productive countries to generate wealth.  Core energy-consumers, such as China, help develop the Gap and work towards peace in order to do business.  Gap energy-providers, such as Russia, create chaos and extort wealth from the Core in order to pay for their eratic behavior.

Related: Europe looks like it will respond in a reasonable way. So good news for the Southern Energy Corridor, but news for Russia’s South Stream.

3 thoughts on “Russia, spurned by China, lashes out at Europe”

  1. If they reduce energy flows (which strikes me as counterproductive), the big question will be whether “maintenance issues” require a temporary reduction or if they come out and admit what they’re doing.

  2. Reducing oil and natural gas flows to Germany and Poland makes it a lot more attractive to build nuclear power plants there. Although the Greens are no longer a power in the German legislature, I think that they can still muster enough political power to make constructing new nuclear plants in Germany extremely difficult.

    That is what makes joint ventures to have French designed nuclear power plants built in Poland. The French safety record with their nukes is excellent. They can get a much better return on their investment by building new plants in Poland than they will see from building additional plants in France (although additional French plants are still worth doing) and they will gain additional “soft power” in the EU by improving their economic relationships with “New Europe”.

  3. Mark in Texas,

    Excellent point.

    We should be encouraging such nuclear investment by western Europe in central Europe (Georgia, Ukraine, Poland, and so on).

    As Dan Nexon mentioned in an earlier post, one reason for the hostile US reaction to Russia’s invasion of Georgia is that there is no “Russia lobby” in the US. We need to make sure their is a ‘central Europe’ lobby inside the big powers of Europe.

    Dan Nexon,

    Europe’s lack of sanctions against Russia [1] make such counter-productive moves less likely, which is too bad.

    The article you linked to mentioned

    “Isolating Russia would be counter-productive, because its international economic integration is the best discipline on its politics,” Miliband said.”

    which in the case of Russia is an absurd claim — as a resource-exporting gap state, the only ‘economic discipline’ Russia receives is that things that cause high oil prices are good, and that things that cause low oil prices are bad

    [1] http://duckofminerva.blogspot.com/
    [2] http://news.yahoo.com/s/nm/20080902/ts_nm/georgia_ossetia_dc_1

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