Located between Europe and the Middle East, Cyprus has historically been of strategic significance to powers on either side of the Mediterranean Sea. The discovery of natural gas off its shores has raised the island’s geopolitical profile — and might help it overcome communal tensions.
Cypriot waters are estimated to contain between 140 and 220 billion cubic meters of gas with an approximate value of €38 billion.
Exploration should spur economic growth and could make it easier for internationally-recognized Greek Cyprus and Turkey to hash out a compromise for the future of the island. Read more
An Americans sanctions bill that explicitly mentions the Nord Stream 2 pipeline has set off alarm bells in Berlin and Vienna.
In a panicky joint statement, the foreign ministers of Germany and Austria urge the United States not to impose “illegal extraterritorial sanctions” on the European companies that are building a pipeline under the Baltic Sea.
Sigmar Gabriel, a social democrat, and Sebastian Kurz, a conservative, warn that such penalties could affect transatlantic relations in a “new and very negative way” and “diminish the effectiveness of our stance on the conflict in Ukraine.”
European countries and the United States are currently united in condemning Russia’s annexation of the Crimean Peninsula and its support for an insurgency in southeastern Ukraine. Both sides have imposed sanctions on Russia. Read more
Europe’s supposed dependence on Russian natural gas is still frequently cited within the context of East-West relations. But this is an outdated view, argue the Brookings Institutions’ Tim Boersma and Michael E. O’Hanlon.
The two write that EU efforts to wean the bloc off its dependence on Russia, set in motion after the latter occupied and annexed the Crimean Peninsula from its former satellite state Ukraine in 2014, are paying off.
Russia still provides a third of Europe’s gas. But the continent has quietly turned the tables on its supplier in several ways, from expanding storage capacity to investing in alternative energy.
“One might say that Europe has escalation dominance over Russia,” Boersma and O’Hanlon argue; “the latter needs to export to Europe more than Europe need Russian hydrocarbons.” Read more
A proposed Baltic Sea pipeline that would allow Germany and Russia to bypass Central Europe is dividing Chancellor Angela Merkel’s ruling coalition.
Manfred Weber, the German head of the conservative bloc in the European Parliament, has come out against the proposed pipeline, writing that it could have “detrimental consequences for the gas supply in Central and Eastern Europe, including Ukraine.”
If Russia were to pipe more gas through the Nord Stream network, Ukraine could lose up to €2 billion per year in transfer fees.
Countries in Central and Eastern Europe earlier wrote the European Commission to express similar concerns. They argued that allowing Russia to bypass the region would play right into its hands.
“Preserving the transport route through Ukraine is the strategic interest of the EU as a whole,” the countries said, “not only from an energy security perspective, but also reinforcing the stability of the Eastern European region.” Read more
2003 was a different era. The United States waged a war of choice in Iraq; Vladimir Putin’s Russia was seen as a paper tiger; China’s economic boom roared but didn’t threaten; Dubai was unknown; and the United States seemed like it would forever be an oil importer.
Much has changed. But today, the price of oil dropped to $27 a barrel, last seen in the heady days of the first W. Bush Administration.
There’s a lot going on here. Let’s get super. Read more
Falling Oil Price Forces Russia to Squeeze Spending
With the international price of oil falling — hitting less than $30 per barrel on Friday — Russia is rapidly depleting its rainy-day funds and forced to implement 10-percent cuts in spending across the board.
Bloomberg reports that the Reserve Fund, one of Russia’s two sovereign wealth funds, is running out of money. There was only $50 billion left last month.
That may not suffice to cover this year’s deficit. Russia’s 2016 budget is $30 billion in the red and that assumes an average oil price of $50 per barrel. Read more