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EU Shrugs Off Russian Threat To Cut Oil Supplies

Semyon Vainshtok, head of Transneft (file photo) (epa) BRUSSELS, April 25, 2006 (RFE/RL)  -- The European Union has shrugged off a threat by Russia's state-owned oil pipeline company Transneft that it may reduce oil supplies to Europe once a planned pipeline to Asia is completed.

Semyon Vainshtok, who heads Transneft, was quoted today as saying Russia has "overfed" Europe with oil, driving down prices through oversupply.

He said that, once the projected pipeline to Asia is built, Transneft may redirect some of the oil supplies from Europe to China.

A European Commission spokesman, Ferran Tarradellas Espuny, said "in an open market, it's perfectly logical that suppliers look for different customers," adding that "we are looking for different suppliers. So, if they want to do so, they are free" to do so.

However, the European Commission also said it expected all suppliers to meet their commercial commitments.

Transneft's threat today came after similar comments last week by Russia's state-controlled natural gas company Gazprom.

Russia's Gas Strategy

Russia's Gas Strategy

RUNNING HOT AND COLD The crisis over Russian supplies of natural gas to Ukraine that erupted on New Year's Day has implications that spread well beyond these two countries and will impact both economic and political policymaking throughout Europe. On January 19, RFE/RL's Washington, D.C., office hosted a briefing the examined the ramifications of the natural-gas conflict.

CLIFFORD GADDY, a senior fellow at the Brookings Institution, outlined Russia's "grand energy strategy," in which Ukraine is perceived as merely an obstacle frustrating Russia's energy ambitions in Western Europe and therefore a nonentity in Russia's broader strategic planning. According to Gaddy, Russia's strategic goal regarding energy is to maximize the role of its own energy resources in the world energy markets, so as to increase its geopolitical influence. To do this, it must reduce competition and maximize dependency on its own energy resources, as well as ensure a stable supply.

TARAS KUZIO, a visiting assistant professor at George Washington University, rebutted Gaddy's argument, claiming that Russia's actions evidenced a complete lack of geopolitical strategy and resulted in strong denunciations by Western countries and a loss of political allies in Ukraine. According to Kuzio, Russian President Vladimir Putin's desire to have a deal signed by the January 4 European Union energy summit outweighed his hope of reinforcing opposition to Ukrainian President Viktor Yushchenko during the run-up to Ukraine's March 26 parliamentary elections.

RFE/RL Coordinator of Corruption Studies ROMAN KUPCHINSKY did not fully agree with Kuzio's assessments of Yushchenko or Ukraine. He outlined three major problems that are feeding the conflict between Russia and Ukraine. The biggest, he argues, is that the state-controlled Russian gas giant Gazprom holds a monopoly on natural-gas sales outside the CIS. Kupchinsky also decried Ukraine's consumption of natural gas, terming it "out of control." Corruption is also a major factor in the conflict, Kupchinsky said, although the extent to which it taints the deal struck between Russia and Ukraine remains unknown.


Listen to the complete panel discussion (about 90 minutes):
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