Gas Exploration Opens New Doors in Nicosia

View from Nicosia of the Northern Cyprus flag painted on the southern slope of the Kyrenia Mountains, January 4
View from Nicosia of the Northern Cyprus flag painted on the southern slope of the Kyrenia Mountains, January 4 (Wikimedia Commons/Alexander Savin)

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

Russian Gas Pipeline Triggers Transatlantic Spat

Sigmar Gabriel Sebastian Kurz, the foreign ministers of Germany and Austria, deliver a news conference in Vienna, February 27
Sigmar Gabriel Sebastian Kurz, the foreign ministers of Germany and Austria, deliver a news conference in Vienna, February 27 (Austrian Foreign Ministry/Dragan Tatic)

An Americans sanctions bill that explicitly mentions the Nord Stream 2 pipeline has set off alarm bells in Berlin and Vienna. Read more

May Adopts Energy Policy Her Predecessor Called “Nuts”

Prime Ministers Theresa May of the United Kingdom and Lars Løkke Rasmussen of Denmark answer questions from reporters in Copenhagen, October 10, 2016
Prime Ministers Theresa May of the United Kingdom and Lars Løkke Rasmussen of Denmark answer questions from reporters in Copenhagen, October 10, 2016 (The Prime Minister’s Office/Tom Evans)

British prime minister Theresa May has adopted a policy her Conservative predecessor, David Cameron, once described as “nuts”.

When the opposition Labour Party proposed to freeze electricity rates in 2013, Cameron, then the Conservative Party leader, ridiculed it.

Now May has taken it over. Read more

Europe Quietly Breaks Free from Russian Gas

A gas-fired power plant is constructed in Eemshaven, the Netherlands, October 30, 2010
A gas-fired power plant is constructed in Eemshaven, the Netherlands, October 30, 2010 (Nuon)

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 But this is an outdated view, argue the Brookings Institutions’ Tim Boersma and Michael E. O’Hanlon.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

Russian Pipeline Divides German Right

Manfred Weber, leader of the European People's Party, makes a speech in the European Parliament in Brussels, April 28
Manfred Weber, leader of the European People’s Party, makes a speech in the European Parliament in Brussels, April 28 (European Parliament)

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

What Oil Prices Mean for Geopolitics

Oil industry in Eddy County, New Mexico, August 29, 2013
Oil industry in Eddy County, New Mexico, August 29, 2013 (Blake Thornberry)

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

View of Moscow's Red Square from Saint Basil's Cathedral, Russia, October 12, 2014
View of Moscow’s Red Square from Saint Basil’s Cathedral, Russia, October 12, 2014 (Brando.n)

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