This week’s class on ‘Russia and the West’ looks at the Russian oil and gas industries. The week’s big news on the subject is the signing of another natural gas mega deal between Russia and China. Russia will deliver 30 billion cubic metres of gas annually to China via a new western route, the Altai Pipeline. This follows a previous deal in May of this year to deliver gas into eastern China through the Power of Siberia Pipeline, a deal supposedly worth about $400 billion to Russia over 40 years.
Western commentators always view Russian gas deals through political lenses. In this case, they are cited as evidence that Russia is ‘pivoting’ towards China, seeking a closer alliance with its Asian neighbour in order to reduce its dependence upon the West. This is a process supposedly accelerated by recent tensions between Russia and the West, and especially by the imposition of economic sanctions against Russia because of its role in the war in Ukraine.
But is this explanation of Russia’s actions accurate?
Only partly, I would say. Certainly, many Russian political and economic leaders are speaking of the need to find alternative trading partners to Europe. This means not only China, but also the other BRIC countries – Brazil and India. However, I would caution against making too much of this. One cannot simply shift one’s trade from one part of the world to another overnight, let alone do so without substantial cost. Furthermore, this year’s gas deals with China are only preliminary in nature. Crucial details of the first agreement remain to be decided, and its practical implementation is far from a done thing.
More significantly, it would be wrong to see Russia’s desire to trade with China as solely, or even primarily, a reaction to tensions with the West. As Vladimir Putin said in his speech to the Valdai Club in October:
Some are saying today that Russia is supposedly turning its back on Europe – such words were probably spoken already here too during the discussions – and is looking for new business partners, above all in Asia. Let me say that this is absolutely not the case. Our active policy in the Asian-Pacific region began not just yesterday and not in response to sanctions, but is a policy that we have been following for a good many years now. Like many other countries, including Western countries, we saw that Asia is playing an ever greater role in the world, in the economy and in politics, and there is simply no way we can afford to overlook these developments.
We in the West are very prone to a common cognitive failure. We think that what other countries are doing is always somehow about us, and thus requires some response from us. But often it isn’t, and doesn’t. Russia would have sought stronger ties with China regardless of what happened in Europe, and if Russia and China both end up better off as a result, then that is all to the good.