Stability Analysis of Russia-EU Energy Relations after the Ukraine Crisis from Perspective of the Interdependence Theory

Undoubtedly, in the new century, energy is a vital element for the survival of all countries and its stable and cheap supply has become one of the most important concerns of countries and global economies. Russia is the largest gas and the third-largest oil producer in the world. The European Union is the largest consumer of energy in the world because of limited energy resources. Complementary economies between Europe and Russia, their geopolitical location and geographical proximity, have made symmetrical interdependence between them.
Energy and its security have been one of the most key and sensitive areas of cooperation between Russia and the European Union. The EU’s concern is to “ensure the security of fossil fuels supply” and Russia’s response to this concern is to “guarantee the demand for gas” in the long run. Russia’s main goal is to achieve sustainable gas exports at the highest possible prices, and in this regard, the dominant energy companies, including Gazprom, have been most effective in pursuing Russia’s national interests and Moscow’s foreign policy.
Russia seeks to make Europe more and more dependent on it and has pursued various policies to this end. One of these policies is the policy of “discrimination between customers”. Accordingly, Gazprom prefers to deal with EU members individually rather than as a group. For example, lower-priced sales to countries with access to alternative energy sources (northwestern Europe) and higher-priced sales to countries that do not have enough alternatives (Central and Eastern Europe). The second policy is to “conclude long-term contracts with customers”. The third policy is to “monopolize gas reserves by consolidating its control over strategic energy infrastructure”, especially pipelines in Europe and Eurasia, by purchasing and acquiring refineries, pipelines and transmission networks. The fourth policy is to “establish a natural gas price control cartel”. This will be a strong lever for Russia to advance its political and economic interests.
The European Union is also one of the world's largest consumers of natural gas and is interested in low prices and secure energy supply and has pursued several key policies to this end: The EU’s first policy is to “integrate member states into a European energy market”. Its second policy is to “encourage a reduction in dependence on Russian gas imports while diversifying its gas exports”. The third policy is to “diversify the energy basket”. The EU supports all alternatives to replace Russian gas imports from reducing energy consumption to the use of alternative fuels such as renewable energy and alternative gas sources such as liquefied natural gas namely Nabco and shale gas. Despite all initiatives put forward by Russia and the European Union to reduce their dependence on each other and their strong emphasis on the need for diversification and finding safe alternatives, these policies do not seem to be feasible in practice. In the current context, the EU seems to have limited alternatives to Russian energy. It is difficult to increase imports from North Africa; because the capacity of Italian pipelines is fully utilized. Increasing exports to Spain will not help either, as no more gas can be sent to Europe from the Iberian Peninsula. Relying on oil in the Middle East, the current crisis zone, is also unwise, as there is always the concern that terrorist groups will target pipelines and production facilities throughout the region, closing energy routes such as the Strait of Hormuz and leaving Iran in a state of disarray. The existence of huge energy reserves and special geopolitical and geostrategic position, due to US opposition and competition from countries such as Russia and Turkey, cannot be a good market for the union.
Energy and its unparalleled role in geopolitical competition have shaped some sort of global division between countries: 1. Energy exporting countries, 2. Energy importing countries, 3. Energy transit countries. All of their actions and behaviors to reach further benefits make geopolitical interests of global energy. This article seeks to examine Russia’s actions, reactions, and behaviors as an exporter of energy, the EU as an importer of energy after the Ukraine crisis. The article seeks to answer the question “what role has energy played in Russia-EU relations since Ukraine crisis?”
The developments in Ukraine caused a lot of fluctuations in the political, security, and economic relations between Russia and the European Union. Following the Ukraine crisis, a new Cold War has broken out between Russia and the West. The adoption of a resolution against Russia on the illegal act of annexing Crimea to its territory, the removal of Russia from the G8 summit, the suspension of the new visa agreement, economic sanctions, and especially sanctions on those involved in the crisis, sharp decline in exports and imports, are examples of suspension of relations between Russia and the European Union after the Ukrainian crisis. Nevertheless, energy relations between Russia and the European Union have so far not been affected by political interests and have continued as before. Russia, which has always used its energy as a tool to advance its political goals, has not only used its energy against the bloc since the Ukraine crisis and strained its relations with the European Union, but it has also come up with some plans. It has sought to consolidate its trade with the union by removing Ukraine from the energy transit route to Europe, replacing new pipelines, including North Stream 2 and using Turkey’s territory, and reducing Kyiv’s influence on the energy transit route. Despite the political, security, and economic ties between Russia and the European Union, it seems that the energy variable has prevented spilling over their problems to other areas and helped maintain two players’ relationships.
The results of the analysis of the conditions indicate that an increasing interdependence between them for at least the next decade especially in the gas sector will have remained. This is mainly related to Gazprom’s dependence on the European market, the technical problem of replacing Russian gas imports in the European Union, and long-term contracts by 2030, which could result in heavy fines for parties seeking to terminate the contract.