Russia's best ally: The situation of the Russian oil sector and forecast for its future. OSW Study 39/2012

Oil is a strategic raw material for Russia and one of fundamental significance for the functioning of the state and its future. Taxes on oil production and exports are the most important source of state budget revenues which guarantee Russia maintains its political and economic stability. Russia is building its international position on the basis of its vast raw material and energy potential. While a great number of various publications have been devoted to Russian gas and Gazprom, surprisingly little research has been done into the present condition and possible future developments of the Russian oil sector, despite the fact that oil has and will have a much greater impact than gas on the functioning and the future of Russia. The main objective of this text is to describe the present situation of the Russian oil sector, its problems and the challenges it is posing, as well as the government’s policy towards this key branch of the Russian economy. This will be an introduction to an attempt to answer to the questions about the possible future production and the export levels of Russian oil, also broken down into the European and Asian directions.

The turn to the East. The flawed diversification of Russian foreign policy. OSW Point of View Number 44, November 2014

The ‘turn to the East’ proclaimed by Russia in 2010 has failed to bring about a fundamental breakthrough in her relations with Asian countries, nor has it produced impulses for the economic modernization of Russia’s Far Eastern territories. Although the energisation of Russian policy towards Asia which has taken place under this slogan has diversified Russian foreign policy somewhat, this diversification has two weak points: Firstly, it has occurred only in the political sphere. The share of Asian countries in Russia’s foreign economic relations has not risen significantly in comparison with the share of European and North American countries. Secondly, the ‘turn to the East’ has turned out primarily to be a turn towards China. In all spheres – diplomatic, economic, energy and military – it is Beijing that has become the most important Asian partner for Moscow. The result is that the policy that aimed to limit the excessive – in the Kremlin’s view – dependence of Russia on the West is likely to turn Russia into a ‘junior partner’ of the People’s Republic of China.

Putin: The morally depraved degradation of a strong state leader. CEPS Commentary, 31 March 2015

In a new CEPS Commentary, Michael Emerson calls for an end to diplomatic euphemisms in describing Putin’s tragic degradation of Russia, its political regime and society. The assassination of Boris Nemtsov on February 27th signals one more step down this dreadful path.

NATO’s presence in the Baltic states – reassurance of allies or deterrence for Russia? OSW COMMENTARY Number 169, 29.04.2015 2015-04-29

In late March and early April, the US Air Forces in Europe (USAFE) held an exercise in Estonia, during which US F-16s destroyed ground targets in an Estonian firing range. Around the same time the Americans held a drill with the Swedish and Finnish Air Forces over the Baltic Sea. The United States has been playing a leading role in the process of strengthening NATO’s presence in the Baltic states. As far as the Western European allies are concerned, Germany will follow in the footsteps of Denmark and the United Kingdom, both of which made significant military contributions to the strengthening of the allied presence in 2014, and will deploy the largest number of troops in 2015. Non-aligned Sweden and Finland, key for the performance of NATO operations in the Baltic states, have been emphasising their military and political readiness to co-operate with NATO in the event of potential crises or conflicts. Comparing NATO ‘s military presence in the Baltic states before and after the outbreak of the Russian intervention in Ukraine, it is clear that NATO has stepped up its engagement considerably. However, its scope is still relatively small, given the much larger military potential and mobilisation capacity of Russia. Moreover, the message sent by NATO’s actions may be diminished by the political, military and financial constraints faced by the allies and Sweden and Finland. It seems that the greatest risk to the military security of the Baltic states currently appears to be the possibility that Russia could wrongly assess the reliability of NATO’s security guarantees.

The War republics in the Donbas one year after the outbreak of the conflict. OSW Commentary Number 174, 17 June 2015

More than one year since the first pro-Russian moves in the Donbas, separatists have taken control of parts of the Donbas and Luhansk oblasts but are still unable to form truly functioning administrative structures. The exercise of power by the central administration of the so-called ‘Donetsk People’s Republic’ (DPR) and ‘Luhansk People’s Republic’ (LPR) is restricted to resolving problems as they arise, while administration proper is the prerogative of the local authorities reporting to them which had been performing this function before the conflict broke out. The way the situation is developing and the fact that access to information is restricted make it difficult to determine the structure of the separatist government in more detail, precisely how it is organised, and what the internal hierarchy is like. The overriding goal of the governments of the DPR and the LPR is to maintain and develop their military potential. In effect, the lives of the so-called republics are subordinate to military goals. The Donbas separatism is a conglomerate of different groups of interests, with Russia at the fulcrum. Its representatives set the main tactical and strategic goals and thus have a decisive influence on the development of the situation in the region. Individual separatist groupings come into conflict, and some oligarchs linked to the former Party of Regions circles have also been making attempts to maintain their influence. The struggle between individual groups of interest is intensifying as the situation on the war front becomes calmer. Since the situation has temporarily stabilised after the seizure of Debaltseve, the central governments of the DPR and the LPR have made attempts to expand their influence, combating armed criminals who are outside their control and that of Russia. The civilian population is taking the brunt of the devastation caused by the war and the increasing militarisation of the region. Despite the fact that the intensity of the fighting on the war front is falling, worsening humanitarian problems are causing refugees to continue their flight from the territories controlled by the separatists. 2 million people have fled the conflict zone since the beginning of the war: 1.3 million of them have found shelter in other regions of Ukraine, and more than 700,000 have left for Russia. The region has also sustained great economic losses – most mines have been either destroyed or closed, many industrial plants have restricted or completely discontinued their production, and many firms have been taken over by force. In effect, the region has seen an economic downturn.

The consequences for Russia of the nuclear deal with Iran. OSW COMMENTARY NUMBER 177/03.08.2015

The five permanent members of the UN Security Council (the USA, the United Kingdom, China, France and Russia) plus Germany and the European Union signed a deal with Iran on 14 July in Vienna (a Plan of Action with five appendices, henceforth referred to as the Vienna Agreement). Under this agreement, Iran undertook to restrict its nuclear programme and to bring it under international scrutiny for 15 years in exchange for a gradual lifting of international sanctions (both those imposed between 2006 and 2010 by the UN Security Council and the unilateral US and EU sanctions). Even though Russia has officially reacted positively to this deal, the consequences it will have are rather ambiguous from Moscow’s point of view. Iran looks set to become stronger and will possibly normalise its relations with the West, and especially the United States. This, in political terms, is a disadvantage for Russia. The Kremlin’s ability to use its policy towards Iran as a bargaining chip in contacts with Washington will be reduced significantly. In turn, the benefits will include improving the perception of Russia in the West and the opening up of new opportunities for the geopolitical game in the region, both with Iran and its opponents in the Arab world. Similarly, in economic terms, the possible lifting of sanctions will offer Russia new opportunities to achieve immediate benefits owing to co-operation in the nuclear and military-technical areas. In the short term, the lifting of sanctions will not pose any threat to Russia’s position on the global energy markets. However, in the long term, the end of Iran’s international isolation may bring negative consequences for Russia, such as the dominant position of Western and/or Chinese companies in the Iranian upstream sector, rising exports of Iranian oil and gas to EU and Asian markets (which are essential for Russia) and the downward pressure on oil and gas prices.

The shadow of Chornobyl. Ukraine thirty years after the disaster. OSW COMMENTARY NUMBER 210/22.04.2016

Thirty years after the Chornobyl nuclear power plant disaster, its aftermath and consequences are still a permanent element of the economic, environmental and social situation of Ukraine, Belarus and some regions of Russia. Ukraine, to which the scope of this text is limited, experienced the most severe shock because, among other factors, the plant where the accident took place was located just 100 km away from Kyiv. Its consequences have affected the course of political developments in the country, and have become part of the newly-shaped national identity of independent Ukraine. The country bore the huge cost of the clean-up effort but did not give up on nuclear energy, and today nuclear power plants generate more than half of its electricity. The system of social benefits for people recognised as disaster survivors, which was put in place by the Soviet government, has become a huge burden on the country’s budget; if implemented fully, it would account for more than 10% of total public spending, and is therefore being implemented to only a partial extent. This system has reinforced the Ukrainian people’s sense of helplessness and dependence on the state. The disaster has also become part of the ‘victim nation’ blueprint of the Ukrainian national myth, which it has further solidified. The technological and environmental consequences of the disaster, and hence also its economic costs, will persist for centuries, while the social consequences will dissipate as the affected generation passes away. In any case, Chornobyl will remain an important part of the life of the Ukrainian state and society.