Wednesday, 23 March 2022 00:00

Oil Sanctions Against Russia Are a Must

By Mamuka Tsereteli

March 23, 2022

https://cepa.org/oil-sanctions-against-russia-are-a-must/

CEPA logo

Sometimes sanctions hurt the West as well as the targeted regime, but that cannot be a reason to hesitate.

Short of direct military involvement, oil sanctions represent the single most important policy instrument available to the West to sway Russian President Vladimir Putin’s political calculus. They are a tool that needs to be wielded resolutely.

Last year, Russia's total exports reached $489.8bn. Of that, energy (in the form of crude oil, pipeline natural gas, and liquified natural gas) accounted for roughly half, nearly $241bn, with the lion’s share generated by the sale of oil. Last year's average price of oil was $68 per barrel, and with the price of oil soaring (benchmark Brent crude was about $115 a barrel on March 22), it is providing the Kremlin far greater funds to fuel its aggression in Ukraine.

To be sure, the sanctions invoked so far on the Russian financial system, oligarchs, and certain industries will cause serious harm to the economy in the long run. They will also have an immediate effect on the wealth of oligarchs and the living standards of ordinary citizens. However, they will not deliver a fatal blow to the Putin regime as long as oil revenues flow into Russia. That’s because these funds oil Putin’s machine; they keep his security apparatus operating, and allow him to provide at least basic services to Russian citizens, thereby keeping their level of discontent low.

Based on this realization, the Biden administration on March 8 announced that it was banning the import of Russian oil, natural gas, and coal. So far, however, Europe has not followed suit.

Critics on the continent have opposed energy sanctions on the grounds that they would do serious economic damage given the reliance of many countries on Russian fuels. Indeed, Europe’s dependency on Russian energy has been a topic of perennial concern in recent years – but little concrete action. Germany is the largest importer, by product value, of Russian oil within the European Union. In 2021, the total EU energy import value from Russia stood at some $150bn, of which $104bn was for oil products. Germany was the largest importer at an estimated $23.6bn worth of crude oil, gasoline, and diesel.

As a result, European nations would undoubtedly feel the pinch if they went ahead with energy sanctions against Russia. As German Chancellor Olaf Scholtz said on March 7, Russian energy imports had to continue for now because oil and gas “cannot be secured in any other way.”

It is true that sanctions would hit Europe hard — EU states rely on Russia for 40% of energy supplies. Any such discomfort, however, needs to be balanced against new global realities — and the likely long-term economic and geopolitical costs if the current war in Ukraine continues.

Here, it’s necessary to clarify the nature of the energy business, and oil in particular. Oil is a global commodity, which means that there is a global oil market where prices are determined by supply and demand. In this regard, oil is different from natural gas, which is more a regional commodity and is characterized by price fluctuations in different markets.

As a result, a blanket Western ban on Russian oil won’t serve to take Russian oil off the streets — the Kremlin will simply sell to other consumers (like China.). But a joint U.S.-European ban would significantly constrict the potential buyers, while market forces will do the rest — with alternate clients negotiating cut-rate prices, knowing that the Kremlin has precious few options. The result will be a drastic slump in Russian oil income.

Such a move will admittedly not be cost-free for Europe. In the short term, the continent is likely to experience price hikes and commodity shortages. But equilibrium will be restored in time – and in a manner that disadvantages Russia.

Most of all, European leaders need to understand that the long-term costs of inaction are liable to be measured in both economic pain and humanitarian suffering, as oil revenue continues to fuel Putin’s war machine. Officials in Brussels have the ability to alter this equation, if they have the political will to do so.

Mamuka Tsereteli is Senior Fellow for Eurasia at the American Foreign Policy Council in Washington, DC.

Published in Staff Publications
Thursday, 10 March 2022 07:19

No, the War in Ukraine is Not about NATO

By Svante E. Cornell

March 9, 2022

https://thehill.com/opinion/national-security/597503-no-the-war-in-ukraine-is-not-about-nato

Hill

Russia's invasion of Ukraine has led to widespread condemnation and an unparalleled outpouring of support for Ukraine. At the same time, a motley crew, including some academics and former U.S. officials, has essentially blamed the war on the West, and in particular NATO enlargement. The argument is basically that Russia would not have become so aggressive if Western powers had been more accommodating. This line of thinking, however, is simply incorrect.

That’s because Russia rediscovered its imperial vocation before NATO enlargement, and the war in Ukraine is, in fact, about Putin’s great power ambitions.

Russian leaders have emphatically argued that NATO countries, led by the United States, violated assurances made to Moscow at the end of the Cold War that the alliance would not expand to the east. This claim, however, has been debunked as a myth. Even the last Soviet leader, Mikhail Gorbachev, has denied that the issue of NATO enlargement was even discussed at the time. Russian President Vladimir Putin himself did not have much to say about NATO enlargement until his infamous speech at the 2007 Munich Security Conference.

 

NATO's enlargement began in the mid-1990s, at a time when the alliance was embarking on a strategic shift, focusing on out-of-area operations instead territorial defense. NATO urged new member states to focus on specific cutting-edge expertise, and programs for partner countries like Georgia were mostly about training for peacekeeping operations in places like Afghanistan. NATO's shift is perhaps best illustrated by the fact that the alliance lacked a workable plan to defend the Baltic states when Russia invaded Georgia in 2008. It is really only after that war, and in particular after Moscow's annexation of Crimea in 2014, that NATO returned to its original focus on collective defense.

The real reason for the deteriorating security situation in Europe — and most blatantly the Russian invasion of Ukraine — can be found in changes that have taken place within Russia itself, and most directly the increasingly imperialist worldview of the Russian leadership.

This change began as early as 1994 and accelerated after Putin came to power. The war in the Russian breakaway republic of Chechnya from 1994 to 1996 was in many ways the starting point. Russia’s defeat there showed how far the country had fallen, leading many former Soviet republics to part ways with Russia. Moscow responded by systematically undermining neighboring states like Moldova, Georgia and Azerbaijan through the incitement of ethnic conflicts on their territories — a classic divide-and-rule tactic.

It is largely forgotten today that Putin built his political career on regaining control of Chechnya, something he did by starting a bloody war on the basis of a lie. It is generally well established today that the explosions in apartment buildings in Moscow in the summer of 1999 that Putin blamed on Chechen rebels were in fact carried out by the Russian security service under Putin's own leadership — the purpose being to create popular support for Putin's war, and by extension his leadership.

Putin's view of the world, in turn, is closely linked to his own hold on power — and that explains Russia's increasingly aggressive actions. 

 

The “color revolutions” in Georgia and Ukraine in 2003-4 had the potential to show that democratic change could happen in former Soviet countries, something that would undermine Putin’s pursuit of authoritarian rule (what he called a "vertical of power"). Democratic rule in neighboring countries therefore had to fail.

Ukraine, in particular, was central to Putin. If a kindred Slavic and Orthodox country like Ukraine developed into a functioning democracy, this could pull the rug out from under Putin's project. If Ukraine showed that something better was possible, why should Russians be content with living under an authoritarian and corrupt regime?

 

For a time, Moscow tried other tactics. Pro-Russian politician Viktor Yanukovych managed to get elected as president of Ukraine in 2010, but his misrule led to the popular uprising of 2013. That event, in turn, showed that the Ukrainian people saw Europe, rather than Russia, as their future. Putin responded by annexing Crimea and starting a war in eastern Ukraine. At home, Putin's rhetoric became increasingly nationalistic, and now focused on concepts such as the "Russian world" in order to foment a divide between Russia and an allegedly decadent West.

For this to succeed, however, Putin needs to bring Belarus and Ukraine into the "Russian world," by force if necessary. This, rather than NATO enlargement, is what the war in Ukraine is about.

Svante Cornell is director of the American Foreign Policy Council’s Central Asia-Caucasus Institute.

Published in Staff Publications

CACI Forum: In Ukraine’s Shadow: The Kazakh crisis and the need for a new U.S. strategy in Central Asia

Since the U.S. launched its Central Asia strategy in February 2020, momentous changes have taken place. The U.S. left Afghanistan, new leadership in Kyrgyzstan, and the recent unrest in Kazakhstan are only the most significant examples. Meanwhile, tensions over Ukraine dominate the U.S. foreign policy agenda. While Central Asia should be part of U.S. strategic thinking, it does not seem to be. Against this background, the Central Asia-Caucasus Institute convened a forum to discuss how U.S. Central Asia Strategy can be improved in light of these circumstances.

Speakers:

Moderator:

  • Svante Cornell, Director, Central Asia-Caucasus Institute at the American Foreign Policy Council
Published in Forums & Events

One of the main tools of Russian influence across Central Asia remains poorly understood.

S. Frederick Starr and Svante E. Cornell
The Diplomat, January 17, 2020

Since Vladimir Putin came to power twenty years ago, much ink has been spent detailing the role of the security services in Russian politics, and it is generally accepted that the Putin regime essentially is a result of the Soviet-era KGB's takeover of the Russian state. But few have connected this to Russian foreign policy in its neighborhood. Meanwhile, many observers have puzzled over the reluctance of former Soviet states to embrace political reform or liberalization. Many have connected this to Russia's active opposition to greater openness and political participation in neighboring states. But few have ventured into specifics – how does Russia make its influence felt? Who is the "enforcer" with the power and resolve to translate Moscow's words into action?

Read More

Published in Staff Publications
Wednesday, 15 January 2020 00:00

Greater Eurasia: Russia's Asian Fantasy

Screen Shot 2020-01-23 at 12.20.07 PM

S. Frederick Starr
Kennan Cable No. 46, January 15, 2020

Is there a grand strategy that informs Russia’s activities abroad and, if so, what is it? For years it seemed that President Putin based his foreign policy mainly on his 2005 statement to the Russian nation that the collapse of the Soviet empire “was the greatest geopolitical catastrophe of the century.” The task of Russian policy was therefore to reclaim by whatever means necessary as much control over former Soviet territories as possible. This led to his seizure of Georgian territory in 2008, his Crimean grab of 2014, and his armed incursions into eastern Ukraine in 2014-2019. More recently, it has led to his forcing Kyrgyzstan to join his politics-driven Eurasian Economic Union and his current bullying of Uzbekistan and Tajikistan to follow suit.

In practice, Russia’s foreign moves in places as diverse as Eastern Europe, Syria, and Africa seem to be guided more by opportunism than strategy. This has not sat well with some members of Moscow’s policy-oriented intelligentsia. Modern Russia, after all, is heir to a half millennium of messianic ideologies that justified and encouraged the expansion of territories under Moscow’s rule. Whether building the Third Rome, destroying the Tatars, placing the Cross of St. Vladimir atop the Hagia Sofia in Constantinople, building a Holy Alliance against future Napoleons, protecting Europe against revolution in 1848, conquering Muslim Central Asia in the 1860s, or aspiring to Sovietize Eastern Europe under Stalin, ideas, not mere opportunism, have driven Russia’s actions abroad. Even as Putin repeated his assertion about the collapse of the USSR, a deficit of theory was forming in Moscow’s foreign policy circles.

Read More

Image via Kennan Cable No. 46: Greater Eurasia: Russia's Asian Fantasy

Published in Staff Publications
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News

  • New Article Series on Changing Geopolitics of Central Asia and the Caucasus
    Wednesday, 24 November 2021 11:53

    Eurasia

  • CACI Initiative on Religion and the Secular State in Central Asia and the Caucasus
    Sunday, 24 January 2021 13:53

    In 2016, the Central Asia-Caucasus Institute & Silk Road Studies Program launched an initiative on documenting the interrelationship of religion and the secular state in the region. This initiative departed from the fact that little systematic reserch had been undertaken on the subject thus far. While there was and remains much commentary and criticism of religious policy in the region, there was no comprehensive analysis available on the interrelationship of religion and the state in any regional state, let alone the region as a whole. The result of this initiative has been the publication of six Silk Road Papers studying the matter in regional states, with more to come. In addition, work is ongoing on a volume putting the regional situation in the context of the Muslim world as a whole.

     

    Case Studies

    Each study below can be freely downloaded in PDF format.

    az-formula-SRSP

    Azerbaijan's Formula: Secular Governance and Civil Nationhood
    By Svante E. Cornell, Halil Karaveli, and Boris Ajeganov
    November 2016   




    2018-04-Kazakhstan-SecularismReligion and the Secular State in Kazakhstan
    By Svante E. Cornell, S. Frederick Starr and Julian Tucker
    April 2018

     

     

     

    1806-UZ-coverReligion and the Secular State in Uzbekistan
    Svante E. Cornell and Jacob Zenn
    June 2018

     

     

     

    2006-Engvall-coverReligion and the Secular State in Kyrgyzstan
    Johan Engvall
    June 2020

     Event video online

     

    2006-Clement-coverReligion and the Secular State in Turkmenistan
    Victoria Clement
    June 2020

    Event video online

     

     

     

    Articles and Analyses

    Svante E. Cornell, "Religion and the State in Central Asia," in Ilan Berman, ed., Wars of Ideas: Theology, Interpretation and Power in the Muslim World, Lanham, MD: Rowman & Littlefield, 2021.

    Svante E. Cornell, "Central Asia: Where Did Islamic Radicalization Go?" in Religion, Conflict and Stability in the Former Soviet Union, eds. Katya Migacheva and Bryan Frederick, Arlington, VA: RAND Corporation, 2018.

  • Basic Principles for the Rehabilitation of Azerbaijan's Post-Conflict Territories
    Wednesday, 07 October 2020 09:01

    Rehab-coverIn 2010, the CACI-SRSP Joint Center cooperated with Eldar Ismailov and Nazim Muzaffarli of the Institute for Strategic Studies of the Caucasus to produce a study of the methodology and process for the rehabilitation of the occupied territories in Azerbaijan. The study was written in the hope that it would prove useful in the aftermath of a negotiated solution to the conflict.

    Such a resolution nevertheless did not materialize. At present, however, it appears that some of these territories are returning to Azerbaijani control as a result of the military conflict that began in late September, 2020. While it is regrettable that this did not come to pass as a result of negotiations, it is clear that the challenge of rehabilitating territories is as pressing today as it would be in the event of a peaceful resolution - if not more, given the likelihood that such a solution would have included a time-table and provided the Government of Azerbaijan and international institutions time for planning.

    It is clear that the study is a product of a different time, as much has changed since 2010. We fully expcect many updates and revisions to be needed should the recommendations in this study be implemented today. That said, we believe the methodoloy of the study and its conclusions remain relevant and would therefore like to call attention to this important study, published in English, Russian and Azerbaijani versions.

    Click to download:

    BASIC PRINCIPLES FOR THE REHABILITATION OF AZERBAIJAN’S POST-CONFLICT TERRITORIES

     

  • Resources on the Armenia-Azerbaijan Conflict
    Monday, 05 October 2020 08:19

    Resources on the Armenia-Azerbaijan Conflict

     

    The Central Asia-Caucasus Institute & Silk Road Studies Program have a long track record of covering the Armenia-Azerbaijan Conflict. This page presents the key resources and most recent analysis. 

    In 2017, Palgrave published the first book-length study of the International Politics of the Armenia-Azerbaijan Conflict, edited by Svante Cornell. The book concluded by arguing that if international efforts to resolve the conflict are not stepped up, “the ‘four-day’ war of April 2016 will appear a minor skirmish compared to what is sure to follow”.

    In 2015, CACI & SRSP released the Silk Road Paper  “A Western Strategy for the South Caucasus”, which included a full page of recommendations for the U.S. and EU on the Armenia-Azerbaijan conflict. These are reproduced below:

    ------------------

    Develop a substantial and prolonged Western initiative on the Armenian-Azerbaijani conflict.

    o This initiative must be led by the United States, in close consultation with its European partners – primarily the EU Commission and External Action Service, and France. Barring some process to reinvigorate the Minsk Process – a doubtful proposition given Western-Russian relations in the foreseeable future – Western leaders must be prepared to bypass that process, utilizing it where appropriate but focusing their initiative on developing direct negotiations between the Armenian and Azerbaijani leaders.

    o The U.S. and its European partners must abandon the practice of relying solely on the Minsk Group co-chairs to resolve the Karabakh conflict. These diplomats have contributed greatly to formulating a workable framework agreement. However, strong and sustained U.S. Government leadership from the top level is needed to complement or, failing that, to replace the Minsk Process. In practice, this means the expressed support of the President, involvement of the White House, and leadership manifested in the appointment of a distinguished citizen as Special Envoy for the resolution of the conflict.

    o The EU must take a more clearly defined and substantial role in the process, by integrating to the highest degree possible the French co-chairmanship of the Minsk Group with EU institutions. While Washington will need to take the lead on the political side, it would be natural for the EU to take the lead in organizing an international development program for the currently occupied Azerbaijani provinces and Karabakh itself. That effort, too, would need to be led by a senior EU figure.

    --------------------------------------------

    In 2011, CACI & SRSP helped launch an extensive study of the steps needed for the post-conflict rehabilitation of Azerbaijan's occupied territories, in cooperation with Eldar Ismailov and Nazim Muzaffarli of the Institute for Strategic Studies of the Caucasus. The monograph "Basic Principles for the Rehabilitation of Azerbaijan's Post-Conflict Territories" can be accessed here

     

    More background resources:

    Svante E. Cornell, "Can America Stop a Wider War Between Armenia and Azerbaijan?", The National Interest, October 2020

    Brenda Shaffer and Svante E. Cornell, Occupied Elsewhere: Selective Policies on Occupation, Foundation For Defense of Democracies, January 2020. 

    Brenda Shaffer and Svante E. Cornell, "The U.S. Needs to Declare War on Proxies", Foreign Policy, January 27, 2020

    Svante E. Cornell, “The Raucous Caucasus”, American Interest, May 2017

    Svante E. Cornell, Small Nations and Great Powers: A Study of Ethnopolitical Conflict in the Caucasus, RoutledgeCurzon, 2001.

    Svante E. Cornell, The Nagorno-Karabakh Conflict, Uppsala University, 1999

    More recent analysis:

    Turkey Seeks to Counter Russia in the Black Sea-Caucasus Region,” Turkey Analyst, 10/5/20, Emil Avdaliani

    Turkey’s Commitment to Azerbaijan’s Defense Shows the Limits of Ankara’s Tilt to Moscow,” Turkey Analyst, 9/25/20, Turan Suleymanov & Bahruz Babayev

     “Cross-Border Escalation between Armenia and Azerbaijan,” Central Asia-Caucasus Analyst, 9/25/20, Natalia Konarzewska

    Russia and Turkey: Behind the Armenia-Azerbaijan Clashes?”, Central Asia-Caucasus Analyst, 8/31/20, Avinoam Idan

    Armenia and the U.S.: Time for New Thinking?”, Central Asia-Caucasus Analyst, 10/2/19, Eduard Abrahamyan.

    Why Washington Must Re-Engage the CaucasusCentral Asia-Caucasus Analyst, 7/8/19, Stephen Blank

    Azerbaijan’s Defense Industry Reform”, Central Asia-Caucasus Analyst, 5/7/19, Tamerlan Vahabov.

    Military Procurements on Armenia's and Azerbaijan's Defense Agendas”, Central Asia-Caucasus Analyst, 3/27/19, Ilgar Gurbanov

    Armenia's New Government Struggles with Domestic and External Opposition,” Central Asia-Caucasus Analyst, 3/20/19, Armen Grigorian.

    Bolton's Caucasian Tour and Russia's Reaction”, Central Asia-Caucasus Analyst, 12/17/18, Eduard Abrahamyan.