If questions about Russia’s commitment to democracy set the agenda, the Group of Eight (G8) summit in St. Petersburg July 15-17 would be fairly easy to predict. Yet energy more likely will become the center of attention. On that subject, predictions are risky.
Russia’s intentions for democracy are clear enough. What the West sees as backsliding under Russian President Vladimir Putin seems fine with Russians. For all his heavy-handedness with the news media, industry, and political opponents, Putin remains enormously popular. Russians apparently correlate democracy with the runaway liberalization that led to financial crisis, widespread personal losses, and emergence of a despised oligarchy in the 1990s. They’ll trade press freedoms and economic and political diversity for the prosperity they associate with revitalization of central authority. And they perhaps appreciate too little the oil-price surge on which their comfort and their country’s economy depend.
Solid base
From this solid political base, Putin can assert in St. Petersburg that his country will find its own balance between freedom and authoritarianism and needs no help from the Western powers it doesn’t trust. In fact, area experts say one of Putin’s largest unspoken aims in St. Petersburg-beyond demonstrating Russian fitness to preside over the club of industrialized democracies-will be to suppress external pressures that might bring to his country some form of the gentle revolutions that have liberalized formerly Soviet states such as Georgia and Ukraine.
To be sure, Putin’s veer off the path toward democracy has disappointed Western observers and chilled Russian relations with several other G8 members. Strains with the US became explicit in a May speech critical of the Kremlin by US Vice-President Richard Cheney in Vilnius, Lithuania. Still, it’s doubtful that the US or any of the other club members-Canada, France, Germany, Italy, Japan, and the UK-will travel to St. Petersburg brimming with hope about changing Putin. And they have other agendas.
Indeed, most will want to discuss energy. Russia made energy security a priority for Europe when it interrupted pipeline gas shipments to Ukraine in a dispute over prices and politics last winter and disrupted European supply. And the US, ever craving oil and gas, will carry to the meeting its concerns not only about Russia’s use of energy to pressure satellite states but also about the ability of private companies to invest safely in Russia and the Caspian producers Moscow still yearns to control.
The US also will seek Russian cooperation with a problem able pull energy talks in St. Petersburg into complex new realms. That problem is Iran. Russia has been cagey about the US-led effort in the United Nations to make Iran suspend uranium enrichment. And it infuriated the US recently by selling Iran conventional missiles capable of defending nuclear sites. A Russian-Iranian alliance may, according to some observers, be developing for the purpose of pushing the US away from the Persian Gulf.
In the background of energy issues directly involving G8 members lurks China, with its burgeoning appetite for oil supply and investment. Iranian President Mahmoud Ahmadinejad made a high-profile appearance at last month’s annual meeting of the Shanghai Cooperation Organization, to which Russia and China both belong. The possibility thus looms of growing cooperation on energy and geopolitical affairs between Russia, China, and Iran.
International intrigues
Maneuvers at the dizzying altitudes of international relations don’t always affect sea-level realities of oil and gas, of course. Yet there can be little doubt that governments want to influence those realities more now than they did just a few years ago. So oil and gas companies ignore the consequent intrigues at their peril.
No one, for example, should fail to notice that, in the run-up to a G8 summit overflowing with energy issues, China National Petroleum Corp. has expressed interest in investing $3 billion in Rosneft’s planned public offering of stock. The Russian oil company hopes to raise $10-11.7 billion. Its main asset: Yuganskneftegaz, which Moscow pried out of Yukos in 2004 while breaking up the company and throwing its politically minded chief executive in jail.