Oil, Carrots, and Sticks: Russia's Energy Resources as a Foreign Policy Tool

Abstract

This paper will explore the growth of Russia's energy leverage in recent years, a source of power which Russia has used both to reward its friends and punish its enemies. It will briefly trace the origins of this power in the integrated energy networks of the former USSR and Warsaw Pact. It will then examine recent cases of the use of ‘oil power.’ Both positive and negative linkage will be considered. Some states-such as Armenia, Belarus and the Ukraine under President Kuchma-have been favored with heavily subsidized energy. Others-such as Georgia, Moldova, the Baltic States and the Ukraine under President Yushchenko-have been targeted by supply disruptions and punitive price increases. Russia's new ‘petro-power’ is of great importance today, and not just for its immediate neighbors: like other ‘petro-states,’ Russia is likely to gain ever more power as oil and gas become scarcer in the future.