WASHINGTON, December 15—Russia, the world’s largest oil producer, is actively seeking new outlets for oil exports. While the economic rationale for this is limited, Moscow perceives significant strategic gains in pursuing a policy that will likely bring rewards ranging from positioning Russia as a strategic partner with China to gaining more leverage over oil transit countries and Caspian producers, writes Adnan Vatansever in a new paper.

This export strategy carries with it considerable policy and economic implications for the European Union, particularly some of its newer members, as well as for the United States. To enhance the stability of oil supplies and improve energy security in Europe, Vatansever outlines three key recommendations for U.S. policy makers:

• Promote information sharing. Washington should help establish a platform to share information on oil production and export trends in Russia and the Caspian Sea region to monitor the destination of Russia’s exports.
• Support Kazakhstan. The United States should help Astana pursue stable export routes for the country’s growing supply of crude oil as Kazakhstan has the potential to emerge as a major global oil supplier.
• Reverse the flow. By supporting initiatives that reverse the flow of oil through the Odessa-Brody Pipeline—which connects Ukraine’s coast on the Black Sea to its border with Poland—Washington can promote oil supply security in Eastern Europe.

“As Russia expands its oil export network and the future destination of its oil exports becomes increasingly uncertain, Washington needs to promote transparency, stability, and predictability,” writes Vatansever.

NOTES

Adnan Vatansever is a senior associate in the Energy and Climate Program at the Carnegie Endowment. He specializes in the energy sectors of the former Soviet republics and Eastern Europe. His particular focus is on energy efficiency and carbon reduction, energy security, and Russia’s economic diversification. Before joining Carnegie, he worked as a senior associate for Cambridge Energy Research Associates (IHS CERA).

The Carnegie Energy & Climate Program engages global experts working in energy technology, environmental science, and political economy to develop practical solutions for policy makers around the world. The program aims to provide the leadership and the policy framework necessary for minimizing risks stemming from global climate change and reducing competition for scarce resources.

Press Contact: David Kampf, 202-939-2233, pressoffice@ceip.org