Energy diplomacy: definitions

• Energy diplomacy – is a diplomacy aimed at securing of a national energy security

• Pipeline diplomacy is policy towards the countries engaged in transportation of oil or gas;

Actors of energy diplomacy

• Global elements: they try to take a control over the prices– International Energy Agency– Organization of Petroleum Exporting Countries

• The basic elements: they involve in bilateral struggle over prices:– The countries-producers of energy: e.g., Russia,

Middle East, Latin America– The countries-consumers of oil: e.g., Western

Europe, USA, China, India– The transit countries: e.g. Ukraine

Russian energy diplomacy: aims up to 2020

1) the North-Baltic direction for transport of the oil to Europe (to avoid Ukraine and Poland)

Russian energy diplomacy: aims up to 2020

2) To gain an access to Caspian oil (The United States is the main rival)

Russian energy diplomacy: aims up to 2020

3) To make India and China to buy Russian oil and gas ( a shift to the Asian-Pacific area)

The main stages of the development of “oil curse” (oil misfortune)

• 1859 – U.S.: E. Drake make first boring of the oil well.

• The first price and measure:

1 barrel (an american - 2 $

Oil Standard Company – the only lrader of oil production

The main stages of the development of “oil curse” (oil misfortune)

• 1980s- a growth of kerosene consumption >> Europe needs oil

• Russia became a rival of the U. S. >>– Russia made the Caucus region as the main

source for oil to sell in Europe

The main stages of the development of “oil curse” (oil misfortune)

• 1920s – Oil was found in colonies of the Great Britain and France in Middle East:– Shell, Britain petroleum, Fransis de Petrol,

Exxon were established >> Seven Sisters– They controlled the prices till the 1960s

1960s – Decolonization >> Nationalization of foreign companies in Middle East, Africa, Latin America >>

The main stages of the development of “oil curse” (oil misfortune): the effect of nationalization

• Suez crisis

The main stages of the development of “oil curse” (oil misfortune): the effect of nationalization

• Radical energy diplomacy of Algeria, Libya ( the growth of the taxes for foreign companies)

• Establishment of OPEC, 1960 >>

• The price of oil became 32 $

• 1980s – a new drop of prices and a belief of cyclical economic crises due to chaning of oil prices.

The main stages of the development of “oil curse” (oil misfortune): the effect of new actors

• 1980s – Mexico, Great Britain, Norway and Canada became the sellers of oil

• 1990s – the states of Asia-Pacific region >>

• The influence of OPEC countries are decreasing.

• 2000s – the great demands of oil in India and China

The grouping of states as to the “oil curse” and their energy diplomacy and effects

• 1) Norway, Great Britain, Canada – political isolation

• 2) Venezuela, Mexico, Russia – cyclic aggressive foreign policy aims when prices are high; the blackmail of foreign companies, corruption, low level of democracy

• 3) Nigeria, Angola (south-west Africa) – diplomacy of World Bank to make them to distribute the funds

The grouping of states as to the “oil curse” and their energy diplomacy and effects

• 4) Iran, Libya, Saudi Arabia – the powerful blackmail, because there are the highest percentage of oil

The grouping of states as to the “oil curse” and their energy diplomacy and effects

• 5) transit countries – the pressure and unstable economic position: Byelorussia, Ukraine, Kazakhstan,

The instrument of energy diplomacy

• The methods of strategic cooperation – temporal agreement of countries to make a special pressure on the others

• coercive diplomacy – a pressure during the talks

• Embargo – an interruption of trade

• Sanctions

• Military intervention

Energy diplomacy of Russia• A history:

– The oil was always played the important role in Russian foreign policy: in the end of 19th century the MFR help to build the pipeline from the south of Russia to Persia (Iran);

– Soviet Union used special policy of prices wars to promote the Soviet oil and gas to world markets

– Oil was used to marinated the economic dependence among Eastern European countries (“Friendship pipeline” was a political not economic project);

– 1970es the USSR opened the Western European market

– 2000-2007: special strategies to promote Russian oil and gas, use it not only for political reasons, but also for profit and security; the main aim is to return former political influence of Russia in crucial regions (Asia and Middle East)

• Visit of Putin to Saudi Arabia, march 2007 (a cooperation in oil production and transit)

energy diplomacy and political aims

• Oil and gas (the aims for every powerful state is to get an access to resources, take control over transit and take control over the prices) are the souse for contradictions:

– Caspian basin:– Iraq and USA and USA and former Soviet Asian

Republics rich of gas– New “Nord-way” to Germany.– Struggle to be a transit countries: if you are a transit

country your position in a region is stronger:• Ukraine or Belarussia;• Turkey/Greece, Bulgaria struggle for the pipeline

“Burgas-Alexandroupollis”:– Putin and Greece signed the agreement about

the building of it, march 2007*

energy diplomacy and political aims

– Caspian region: the most controversial – how to divide the Caspian sea between neighbors:

Homework

• Read file # 26