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

 

MSF: Ebola Crisis Update - 16th October 2014

16 October 2014 Cases Deaths Guinea 1,472 843 Liberia 4,249 2,458 Nigeria 20 8 Sierra Leone 3,252 1,183 Senegal 1 0 Total 8,994 4,492 WHO Figures - Data are based on official information reported by Ministries of Health. These numbers are subject to change ... More>>

ALSO:

Detroit: City-Backed Water Shut-Offs Contrary To Human Rights

20 October 2014 – The city of Detroit must restore access to water for its citizens who remain unable to pay their bills, two United Nations experts urged today, adding that a failure to do so would be a violation of the most basic human rights of those ... More>>

ALSO:

DR Congo: Head Of UN Mission Condemns Deadly Rebel Attacks

A MONUSCO APC is greeted by FARDC soldiers on their way back from the front line in the Beni region of the DRC where the UN is backing the FARDC in an operation against ADF militia. Photo: MONUSCO/Sylvain Liechti More>>

UNESCO Chief Denounces Killing Of Cambodian Journalist

17 October 2014 – The head of the United Nations agency tasked with defending press freedom today denounced the killing of a Cambodian reporter shot while investigating illegal logging in the eastern part of the country. More>>


UN Lauds Role Of Family Farmers In Ending Global Hunger

A farmer at work in a dragon fruit field in Viet Nam (July 2013). Photo: FAO/Hoang Dinh Nam | See more photos More>>


Funding Gap Looms Amid Efforts To Tackle Ebola & ISIS

Funding Gap Looms Amid Efforts to Tackle ‘Twin Plagues’ Ebola, ISIL, Warns UN Rights Chief More>>

ALSO:

  • The White House - Ebola: What You Need to Know

  • Egypt Sentences Another Al Jazeera Journalist

    In another disturbing move against freedom of speech and independent journalism in Egypt, one of Al Jazeera Arabic channel’s presenters, Ahmed Mansour, has been sentenced in absentia to fifteen years imprisonment by Cairo’s criminal court on the absurd ... More>>

    ISIL Advance On Iraqi Town Unleash New Flood Of Displacement

    Syrian Kurds from the town of Kobane seeking shelter in Iraq's Kurdistan region. Photo: UNHCR/D. Nahr More>>

    ALSO:

  • U.S. Department of State - U.S. Condemns ISIL Attacks in Iraq

  • Get More From Scoop

     
     
     
     
     
    World
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news