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1. This Time is Different. The "COVID-Shock" and Future of the Global Oil Market

Author:
Giuliano Garavini
Publication Date:
04-2020
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
Oil markets are facing a perfect storm. The scissors of supply and demand are moving against one another, generating increasing pain on the oil industry and the political and financial stability of oil-producing countries. Global oil demand is dropping due to the recession induced by the COVID-19 shut down of economic activity and transport in the most industrialized countries. Goldman Sachs predicts that global demand could drop from 100 million barrels per day (mdb) in 2019 to nearly 80 mdb in 2020.1 If confirmed, this would be single biggest demand shock since petroleum started its race to become the most important energy source in the world.
Topic:
International Trade and Finance, Oil, Global Markets, and Economy
Political Geography:
Russia, Saudi Arabia, and Global Focus

2. The Global Exchange (Spring 2019)

Author:
Adam Frost, Colin Robertson, Randolph Mank, Robert Hage, Claudia Marín Suárez, David J. Bercuson, Julian Lindley-French, and David Perry
Publication Date:
03-2019
Content Type:
Journal Article
Journal:
The Global Exchange
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
The international arena is as dynamic as ever. The rate of technological development continues to accelerate beyond the pace society is capable of adapting to it. Climate change indicators are approaching and surpassing key thresholds, fragile and failed states are proliferating, and great power competition has returned. Given the magnitude of these challenges, the cultivation of friends, partners and allies is paramount to furthering Canada’s national interests beyond its borders. The lead package of this issue examines some of the global challenges facing Canadian policy-makers and offers recommendations for how best to navigate this unruly world. Colin Robertson outlines today’s messy international arena and emphasizes the importance of Canada’s active engagement. He explains why Canadian leadership must carefully manage the Canada-U.S. relationship and the necessity of supporting multilateral co-operation to stand up against disruptive revisionist powers. He also says Canada should enthusiastically support the implementation of recent trade agreements and address the causes of social upheaval in the Western world. Considering the release of the Trudeau government’s extensive defence policy review, Randolph Mank questions why a similarly extensive foreign policy review was not first conducted. He argues that Canadian foreign policy is misaligned with Canada’s national interests, and therefore, a comprehensive strategic realignment is warranted. Canada’s interests are not best served by ad hoc prescriptions. Robert Hage turns to Canada’s energy policies. He criticizes Bill C-48 for limiting transportation options for Canada’s most valuable hydrocarbon resources. He argues that building infrastructure to the West Coast to facilitate the export of Canada’s oil and gas resources should be handled as a nationbuilding project, vital to Canada’s economic well-being. Francisco Suárez Dávila’s article provides an overview of President Andrés Manuel López Obrador’s first 100 days in office. Mexico’s new leader is a key figure for Canadian policymakers to understand as they manage the trilateral North American relationship, and work to ratify and implement CUSMA. David Bercuson, Julian Lindley-French and David Perry turn to Canada’s defence and security. Bercuson argues NATO is alive, well, and not going anywhere soon, as the Russian threat to Europe remains ever-present. Lindley-French outlines the tactics of Russia’s coercion, the extensive modernization of its military forces and the ambitions that threaten its European neighbours. Finally, Perry returns to Canada’s Strong, Secure, Engaged defence policy two years after its release to provide an assessment of how closely the Trudeau government has followed its spending targets. The 21st century has the potential to be the most violent and chaotic century in human history – or the most prosperous, providing more people with a higher quality of life than any previous era. If Canada’s policy-makers are to successfully manage the challenges of this unruly, messy world, they will have to vigilantly align Canada’s means with its desired ends, including working with other states, like-minded or otherwise, to advance common interests.
Topic:
International Relations, Foreign Policy, NATO, Climate Change, Oil, and Trade
Political Geography:
Russia, Canada, North America, and Mexico

3. Russia’s Energy Strategy-2035: Struggling to Remain Relevant

Author:
Tatiana Mitrova and Vitaly Yermakov
Publication Date:
12-2019
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Russia’s Energy Strategy to 2035 (ES-2035) enters, finally, the home stretch. The Ministry of Energy submitted its version of the document to the Russian Government in early October 2019. Once approved (this is expected before year’s end), ES-2035 will become the best available indication of Russian energy policymakers’ plans. It therefore merits careful consideration. This paper reviews the key goals, scenarios and indicative ranges for output and consumption contained in ES-2035. It thus contributes to understanding the strategic compromises that Russia might be ready to take, as well as those that are unlikely to be acceptable. Our review of the draft ES-2035 suggests that it provides general guidelines to the future evolution of Russia’s energy sectors, but struggles to remain relevant amid fast-paced changes in the global markets. Several crucial but politically sensitive energy issues still need further clarification of policies: the future fiscal regime for oil and gas that could incentivize output and prevent production declines; industrial and technological policy; the choice of the future model for Russia’s gas industry and whether it is going to develop under continued state regulation or in the market environment; climate policy and the strategy to promote (or not) renewables and other technologies of energy transition; and the future of competition in wholesale and retail power markets.
Topic:
Energy Policy, Oil, Politics, and Gas
Political Geography:
Russia and Eurasia

4. The European Union-Russia-China energy triangle

Author:
Georg Zachmann
Publication Date:
12-2019
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
We argue that energy relations between the EU and Russia and between China and Russia influence each other. We analyse their interactions in terms of four areas: oil and gas trading, electricity exchanges, energy technology exports and energy investments. We discuss five key hypotheses that describe the likely developments in these four areas in the next decade and their potential impact on Europe: 1. There is no direct competition between the EU and China for Russian oil and gas 2. China and the EU both have an interest in curbing excessive Russian energy rents 3. The EU, Russia and China compete on the global energy technology market, but specialise in different technologies 4. Intercontinental electricity exchange is unlikely 5. Russia seems more worried about Chinese energy investments with strategic/political goals, than about EU investments We find no evidence of a negative spillover for the EU from the developing Russia-China energy relationship. But, eventually, if these risks – and in particular the risk of structural financial disintermediation – do materialise, central banks would have various instruments to counter them.
Topic:
Climate Change, Energy Policy, Oil, and Europe Union
Political Geography:
Russia, China, and Europe

5. Social consequences of the oil price shock in the resource rich post-soviet countries

Author:
CESD Research Team
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Center for Economic and Social Development (CESD)
Abstract:
This study seeks to determine the impact the fall in global oil prices post-2014 had on the welfare of the populations of three resource-rich post-Soviet states: Russia, Kazakhstan, and Azerbaijan. Changes in welfare will be explored through the analysis of several socio-economic indicators affected by the local currencies’ devaluations. It will be suggested that the single-commodity export dependence of the countries concerned, and the domestic development of non-tradeable sectors faltered in the face of external shocks. Several policy suggestions are offered to mitigate the effects of the economic downturns observed.
Topic:
Oil, Gas, Exports, and Welfare
Political Geography:
Russia, Eurasia, Kazakhstan, and Azerbaijan

6. Russia’s National Oil Champion Goes Global

Author:
Edward C. Chow and Andrew J. Stanley
Publication Date:
02-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
After the Soviet Union collapsed and Russia was roiled by political and economic chaos, many state-owned assets were privatized based on political connections and corrupt practices. The oil sector was a particularly attractive, but by no means the only, target for these privatizations. By the end of the 1990s, almost all of Russia’s oil production was privately owned. In spite of continued nontransparency, the oil sector began to resemble a competitive market with private investors introducing Western technology, financial accounting, and operating and management practices. It also started to attract major foreign investments. The remaining state oil assets were managed by a sleepy state enterprise named Rosneft that, in spite of its name (Russian Oil), produced less than 5 percent of Russia’s oil. Today, majority state-owned Rosneft produces almost half of Russia’s oil. Its daily oil production of 4.6 million barrels, according to its last reported quarterly results, is double that of the world’s largest oil company by market capitalization, ExxonMobil, which last reported daily liquids production of 2.3 million barrels. Rosneft’s rapid rise coincided with the rule of Vladimir Putin, who first became president of Russia in 2000. Its production increases were built largely on the backs of controversial acquisitions of assets previously held by private companies such as Yukos, TNK-BP, and Bashneft. Rosneft’s acquisition spree accelerated after Putin’s close associate and Russia’s then-deputy prime minister Igor Sechin became chairman of its board of directors in 2004. Sechin left government in 2012 to take over as Rosneft’s chief executive officer. Rosneft’s board of directors is now chaired by former German chancellor Gerhard Schroeder. Rosneft’s transformation as Russia’s national oil champion is consistent with Putin’s policy of regaining state control over the commanding heights of the Russian economy, which is more reliant on oil income today than the Soviet Union ever was. Rosneft is Russia’s largest taxpayer and contributed a quarter of government revenue in 2014. Until recently, Rosneft concentrated mainly on consolidating its dominance over the domestic oil patch. It is also Russia’s leading refiner and is increasing natural gas production for direct sales to domestic gas users, producing 67 billion cubic meters in 2016. In 2014, Russia was hit by the twin shocks of a global oil price collapse and Western economic sanctions enacted after its aggression against Ukraine in the Donbas region and annexation of Crimea. These developments affected Rosneft severely since it involved the value of the commodity it produces and sells and restricted Rosneft’s access to international financing when it was heavily indebted from the aforementioned acquisitions. A normal company might hunker down, repair its balance sheet, and wait for external conditions to improve. Instead Rosneft has done the exact opposite and expanded its international business aggressively. As part of the 2014 U.S.-led sanction efforts, Igor Sechin, as the leading figure of Russia’s largest petroleum company and his having “shown utter loyalty to Vladimir Putin,” was directly sanctioned. Further Russian sanctions enacted by Congress in 2017 called on the U.S. Department of the Treasury to submit a detailed report on senior political figures, oligarchs, and parastatal entities as determined by their “closeness to the Russian regime and their net worth.” While the unclassified version of the report released to Congress on January 29 included Igor Sechin, the report was poorly received and largely regarded as nothing more than a “rich list” by Russian experts. However, the report also contains classified annexes, including a list of parastatal entities and supporting analysis, which by definition would have included Rosneft. Although Rosneft’s rapid international expansion is too recent to assess definitely, this paper describes some of Rosneft’s overseas ventures and explores possible motivations, economic and political, behind them.
Topic:
Energy Policy, Oil, Foreign Direct Investment, Sanctions, Gas, Transparency, and Private Sector
Political Geography:
Russia, United States, Europe, and Eastern Europe

7. Russia and the West: Energy Warfare

Author:
Mikhail Krutikhin
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
Center for Transatlantic Relations
Abstract:
This paper is part of CTR's Working Paper Series: "Russia and the West: Reality Check." The nature and shape of the Russian oil and gas industry is not just Moscow’s concern. The ups and downs of Russia’s energy production and exports are factors that affect the global political environment. The influx of revenues from hydrocarbon sales determines the way the Kremlin behaves in the world arena, and the notorious unpredictability of the Russian political leadership becomes even more pronounced when oil prices show an appetite for instability.
Topic:
International Relations, Energy Policy, International Trade and Finance, Oil, Natural Resources, and Gas
Political Geography:
Russia, United States of America, and European Union

8. Political Relations Between Turkey and Georgia in the Post-Soviet Era

Author:
Fatih Mehmet Sayin and Murat Doğan
Publication Date:
10-2017
Content Type:
Journal Article
Journal:
Journal of Liberty and International Affairs
Institution:
Institute for Research and European Studies (IRES)
Abstract:
Georgia and Turkey have become important partners in the Caucasus region after the independence of Georgia in 1991. Two countries preferred to follow pro-West policies in their foreign policy against the Russian factor. They have geopolitical importance and geostrategic location for Russia throughout history. This article analyzes the foreign policies of Georgia and Turkey and examines the Baku-Tbilisi-Ceyhan Crude Oil Pipeline as a common foreign policy between them. The paper found out that this kind of project between Georgia and Turkey would make them important actors rising from the regional level to the global level in the future.
Topic:
Foreign Policy, Oil, History, Bilateral Relations, and Geopolitics
Political Geography:
Russia, Turkey, Caucasus, Georgia, and Mediterranean

9. How to Bring Stability to Bahrain

Author:
Brian Dooley
Publication Date:
02-2015
Content Type:
Working Paper
Institution:
Human Rights First
Abstract:
Washington needs a new strategy to help bring stability and reform to Bahrain. Although the smallest country in the Middle East, Bahrain exemplifies several of the major challenges for U.S. policy in the region: Sectarian tensions exploited by ISIS and other Sunni extremists and by Shi’adominated Iran to fuel conflict Economic troubles linked to public corruption and an over-reliance on oil revenues, exacerbated by sharply falling oil prices Stalled political reform leaving the root grievances of large scale public protests unresolved De facto U.S. support for an authoritarian status quo through a government that fails to deliver good governance and continues to deny basic rights and freedoms to its people, while courting support from Russia and other U.S. rivals Falling public support for the United States Major military assets, in Bahrain’s case the basing of the U.S. Fifth Naval Fleet, threatened by protracted instability
Topic:
Imperialism, Oil, Religion, Military Strategy, Authoritarianism, and Political stability
Political Geography:
Russia, United States, Europe, Middle East, and Bahrain

10. A Useful Pause in Arctic Drilling

Author:
Bruce M. Everett
Publication Date:
09-2015
Content Type:
Journal Article
Journal:
Fletcher Security Review
Institution:
The Fletcher School, Tufts University
Abstract:
Until last year, drilling for oil in the Arctic was the subject of considerable discussion focused not only on the potential impacts of Arctic resources on the oil market, but also on the environmental and geopolitical implications of opening this area to development. Prospects for Arctic drilling dimmed considerably in 2015 when Shell decided to abandon its ambitious drilling efforts in the Burger Field in the Chukchi Sea, writing off several billion dollars in the process. The recent collapse in oil prices has probably put a stop to Arctic drilling for the time being, and this pause may prove useful in resolving some of the outstanding issues.
Topic:
Environment, Oil, Natural Resources, Geopolitics, and Maritime
Political Geography:
Russia, Canada, Norway, Denmark, Greenland, Arctic, United States of America, and Oceans