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Putin’s visit to Saudi Arabia, Qatar and Jordan has become more of an interest after his speech at the Munich security conference. Luckily or unluckily, the visit has to do more about cooperation than merely discussing gas-OPEC. But what does this visit mean from an energy point of view?
Russia is like a closed box and it is not very easy to foresee her intentions. The web of complex relations and the fog of secrecy around its thinking machine hardly gives us any hints about her next move. But it is obvious from Putin’s statements that Russia is quite unhappy with US’s unilateral policy like most of us.
In the 43rd Munich Conference, last Saturday, Putin made a very controversial speech accusing the US of trying to establish a unipolar world. His speech has been critised by the US officials as a sign for a new “cold war mentality”. Speaking frankly, his speech was an open confrontation to US’s unilateral dominance in the world system.
But how dare does he speak in such a manner? Even this single question is an indication of a unilateral world system understanding. Russia today is even stronger than the Soviets of the Gorbachov era, thanks to its energy resources.
Today 25% of gas and oil exports to Europe is from Russia which is also the second net exporter of oil after Saudi Arabia and owner of the world’s biggest gas reserves.
Whatever the forecasts or State of the Union speeches target, Europe’s and the US’s dependency on foreign energy sources are expected to increase. All these expectations are playing to the hands of Russia. So even after Putin, Russia will have a say in the world and challenge the policies she hates, again, thanks to its energy resources.
Russia in this sense is trying to win as much political bonuses as possible with every energy point she has. As Moscow becomes more of an important energy player, she tries to turn this into a political power through economic agreements and cooperation.
First a brief review of his speeches will be made. This will be followed by the statements from the visited countries and finally and briefly different scenarious will be discussed.
Putin’s statements
In Munich he said “I consider that the unipolar model is not only unacceptable but also impossible in today’s world.”. So what is the other pole of the world, EU, Russia, China, India or both of them? (securityconference.de)
In Moscow, at an annual news conference "A 'gas OPEC' is an interesting idea. We will think about it," Putin said. This is an answer to Iran’s proposal to Russia for forming a gas OPEC. (en.rian.com)
In Saudi Arabia, he said "Russia and Saudi Arabia are the world's leading energy producers and exporters, and here it is easy for us to find common ground.". Also added that "To put it in technical terms, our instincts tell us that we are rivals. But this is not so in the context of the growing energy needs of the world,". Lastly he emphasized “This means that we are not rivals, but in fact allies and partners." (Menafn.com)
Also he offered Saudi businessmen Russia’s help in nuclear area. He said “Russia is willing to look into cooperation opportunities in the area of atomic energy,”
In Qatar, during a joint conference with the emir of Qatar, he said “Who said that we have rejected the idea of a cartel? I said it was an interesting idea.". But he also distanced himself from completely accepting the idea by saying “"Whether we will establish this cartel or whether we need it is a separate issue,".
But he promised to send Russian experts to discuss this issue in the Gas Exporting Countries Forum that will take place in Doha, Qatar in April.
And the most important one of his quotes is “Russia is keen to improve co-operation with the Islamic world”.
Saudi Arabia
Putin is the first head of Russian state to visit Kingdom of Saudi Arabia. Saudi Arabia and Russia has an increasing volume of trade relations. The trade has been increased from $88.5 million in 1999 to $400 million in 2005. (New York Times).
Apart from the praising the Russia’s and Saudi Arabia’s importance in the gas and oil production, Russia offered assistance for nuclear development in the Saudi Arabia.
Also Russia plans to launch six satellites for the Saudi’s. Five of these satellites will be telecommunications and data transfer, the sixth one is rumored to be a surveillance one. The satellites will be built by Saudis. (torontodailynews.com)
Qatar
Qatar is one of the most successful countries to attract foreign investment. Chairman of Qatar Chamber of Commerce and Industry, Sheikh Khalifa bin Jassem Al Thani claims that the currently estimated foreign investment in Qatar is around $120 billion.
But Russia does not have a big share of this. Interfax claims that the trade volume between the two countries amount to a total of $1.3 billion in the first 9 months of the last year.(Interfax)
Other than emphasizing the grounds for improving trade relations between the two countries, Qatar has showed its support for a Middle East peace conference.
Jordan
In his Jordan visit, they signed four agreements. The trade volume between two countries in 2006 is around $106 million. The first of these agreements was for the puchase of 6 Russian KA-226 helicopters for civilian purposes.
The second agreement was about a plant to assemble Lada cars in Jordan.
The third agreement is for improving and increasing the flow of investments between the two countries.
The last agreement is for establishing a Jordanian-Russian Business Council to boost commercial relations. (menafn.com)
Jordan also expressed intentions to develop nuclear capabilities before, but whether any talks made on nuclear development is not very clear. But also talks on a possible peace conference have taken place.
Scenarios
Turkish Daily News has published an interesting comment titled “Why did Putin visit the Middle East?” by Robert Freedman. In that commentary Putin’s goals have been summarized in three major points. First to demonstrate Russian’s renewed power and influence in the region where US influence is decreasing, second to increase Russian economic relations and third to minimize Arab support for Chechen rebellion.
In addition to these major points, it is also possible to discuss two possible energy related scenarios.
First one is the gas-OPEC scenario, the second one is the nuclear scenario.
Gas OPEC scenario, is getting more probable as Putin said that their experts will join the GECF in Doha this April. He may have checked the grounds for such an organization. Iran and Qatar is already showed willingness to form such a union.
But Russia is not as enthusiastic as Iran and Qatar, both in technical and economic terms due to her long term commitments to her customers, for forming such a union, but nevertheless she will probably discuss it for sometime.
The second one is the Russia’s nuclear assistance to the countries of the region. With Iranian nuclear program still going on despite the US’s and EU’s opposition, the other countries in the region are also heading for nuclear development. Russia may use this as a chance to sell its nuclear technology and by providing nuclear technology to other countries in the region making it hard for the US to attack Iran on the basis of nuclear enrichment.
There are also very important scenarios, like the cultivation of a new Russian foreign policy as an alternative to US’s failing policies and a possible revenge for the US’s missile shield plan that is involving Poland and the Czech Republic.
Conclusion
Although each or both of those scenarios are quite possible, Russia is using the power gained from her energy card to increase her political influence. If we are talking about a Russian revival today, it is probably due to the increasing importance of energy and energy resources.
Most of the western world will be more dependent on Russia in the future and Putin is well aware of it. But a dependency means nothing without policy goals, because these resources are finite and will extinct. So these resources have to be converted to long term influences for a life after fossil fuels.
In this sense, Russia is using the energy card very wisely. Forming new unions and organization, although technically not very favorable or advantageous will give Russian foreign policy a boost.
From energy perspective, Russia is expected to use cooperation on energy investments, gas-OPEC discussion, nuclear technology and economic agreements more in the coming days, to increase the influence of Russia in the Middle East. Energy is not the only key for such a political move, but surely is the most important one and will remain at the top of the list for some time.
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