World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search

 


Russia Looks East as Relations with Europe Deteriorate

Russia Looks East as Relations with Europe Deteriorate

The standoff between the U.S. and the EU on one hand, and Russia on the other, intensified pretty quickly late last week. The U.S. quickly slapped heavier sanctions on Russia after its annexation of Crimea, leading to a mutual escalation of retaliatory measures. However, it appears that the West gained a bit of leverage at the moment, as the Russian economy has shown some cracks amid uncertainty over how bad this is going to get.

The Russian stock exchange MICEX dropped 3% on March 21, after news that President Obama was considering widening sanctions to include broad sectors of the Russian economy, including the strategically and economically vital energy sector. Although it is unlikely to reach that level, the mere consideration of such a dramatic move has spooked some investors, who are beginning to pull their money out of the Russian economy. Visa and Mastercard reported that they will stop providing payment services for Bank Rossiya, a Russian bank, raising fears that more banks could be caught in Washington's sanctions net.

As of March 21, it was unclear how Moscow would respond. Days earlier, top Russian officials had scoffed at the initial round of U.S. and EU sanctions. But by the end of the week, the Kremlin appeared to be trying to downplay the conflict, using a more measured and conciliatory tone. Vladimir Putin didn't seem to want the standoff to worsen. “I think we need to refrain from taking any retaliatory countermeasures for now,” he said, according to the Wall Street Journal. And Fyodor Lukyanov, a top Russian foreign policy official was quoted as saying, “[e]verything has happened so unexpectedly and so quickly. There's reason to end here.”

More intriguing is the prospect that the more or less severing of relations between Russia and Europe will accelerate a Russian pivot towards China. After all, one of the largest consumers of energy in the world sits adjacent to one of the largest producers of energy in the world – their marriage makes sense. Lukyanov hinted at such a shift in strategic thinking, “[t]he relationship with the West isn't a top priority anymore.”

Russia had probably hoped for a much more supportive response from China on the issue of Crimea, as both countries' interests often align in pushing back against U.S. meddling. However, that priority cuts both ways, prompting China to remain neutral – it sees Russia's annexation as flying in the face of China's policy of non-interference.

Nevertheless, the Russian-Chinese relationship could grow as a result of the brewing conflict between Russia and the West. For years, Russia and China have been unable to seal a natural gas deal that would benefit both. But the two sides are reportedly close to finally agreeing to terms, and with Putinscheduled to visit China in May, there is an added incentive there to finalizing a deal before then. It wouldn't be surprising that with Russia much more eager to reach a deal, China may get its way in terms of pricing – China is hoping for a lower price for natural gas than what Europe receives, which is around $10.54 per million Btu in 2013. That had been a sticking point for years. Now, with Russia a little uneasy, they may bend on the pricing issue. China would stand to gain even more leverage if the U.S. moves towards sanctioning Russia's energy sector.

Gazprom has plans to export as much as 38 billion cubic meters of natural gas to China beginning in 2018. This would require the construction of a $23 billion pipeline in the east. In fact, there are four planned connection points that would tie the two countries intimately together.

Several market analysts had already predicted before the Crimean crisis that a deal would be finalized this year. The latest freeze in Russian-European relations is accelerating Russia's pivot towards China, and an imminent natural gas deal could be a centerpiece of that strategic shift.

Source: http://oilprice.com/Energy/Energy-General/Russia-Looks-East-as-Relations-with-Europe-Deteriorate.html
By Nicholas Cunningham of Oilprice.com

ENDS

© Scoop Media

 
 
 
 
 
World Headlines

 


Signs Of Ebola Decline In Liberia Offer ‘Glimmer Of Hope’

Equipped with UNICEF-developed and Government-approved awareness materials, these girls go door-to-door in West Point, Monrovia, to educate their parents, family members and friends about Ebola and how it can be prevented. Photo: UNICEF/UNI171713/Griggers More>>

ALSO:

Allegations Of Misreporting By Joint Darfur Mission

Ban ‘Deeply Troubled’ by Findings of Review of Allegations of Misreporting by Joint Darfur Mission More>>

Status Quo Not Viable Option’ In Jerusalem

Under-Secretary-General for Political Affairs Jeffrey Feltman briefs the Security Council at its meeting on the situation in the Middle East, including the Palestinian question. UN Photo/Eskinder Debebe More>>

ALSO:

  • ITUC - Israel’s Settlement Expansion is an Outrage
  • World News: No To TPP Trade-Offs

    No to TPP Trade-Offs, Say Public Health, Fair Trade Activists at Sydney TPP Ministers’ Meeting More>>

    ALSO:

  • AFTINET - Fair Trade Group Calls for Release of TPP Text
  • Al Jazeera Interpol Rejects Egypt Request For Red Notice On Journalist

    Interpol, the international organisation for police cooperation, has rejected a request from Egypt to issue one of its red notices against Ahmed Mansour, an Al Jazeera journalist. More>>

    UN-Backed Study: Fruit Flies To Prompt Better Pest Controls

    Bactrocera dorsalis is causing “incalculable damage to horticultural industries and food security” across a swathe of countries in Asia, Africa, the Pacific and parts of South America. Photo: IAEA/Viwat Wornoayporn More>>


    ‘The Only Way To Stop Ebola Is At Its Source’ – UN Chief

    Girls in the city of Voinjama look at a poster that displays information and illustrations about how to prevent the spread of Ebola. Photo: UNICEF/2014/Liberia/Jallanzo More>>

    ALSO:

  • Christian World Service - CWS appeals for help to Stop Ebola
  • UN: Multi-Billion Dollar Horn Of Africa Pledge

    UN’s Ban, Global Leaders Join Forces in Multi-Billion Dollar Horn of Africa Pledge More>>


     
     
     
     
     
    World
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news