Russia Rises in Geopolitical Tumult

By Stratfor
March 17, 2011

The first three months of 2011 have had a steady flow of geopolitically relevant events. A youth named Mohamed Bouazizi, protesting corruption and government harassment in Tunisia, set more than himself alight on Dec. 17: He set an entire region on fire. Soon after, Tunisia and Egypt saw their long-time rulers fall. Libya essentially descended into civil war, and exit is uncertain. On Monday, almost exactly three months after Bouazizi's self-immolation, the Saudi-led Gulf Cooperation Council's forces entered the tiny island nation of Bahrain to prevent Iran from exploiting the anti-government protests there. The region's unrest continues with almost daily action in North Africa and the Middle East. Around the globe, the March 11 Japan Tohoku earthquake rocked the world's third largest economy and has caused the most serious nuclear accident since the 1986 Chernobyl disaster.

Among all this global consternation, Russia is the one power that has the luxury to take stock of it all in relative comfort. Russia has no reason to fear Middle East-style revolutionary activity. Its leadership is genuinely popular at home and safe from populist uprisings, at least for the time being. Russia is not embroiled in any war in the Middle East - unlike the United States, which is involved in two wars and trying hard to avoid a third one in Libya. Russia fears no migration exodus of North African refugees on its borders, as do the Europeans. Even the nuclear accident in Japan seems to be without negative effect for Russia, as the prevailing winds are blowing the radiation toward the Pacific Ocean and away from Russia's eastern city of Vladivostok.

In fact, Russia may be the one country that stands to gain from the various calamities in 2011. First, the general unrest in the Middle East has increased the price of oil by 18.5 percent. As the second largest oil exporter - and one not bound by OPEC production quotas - the increase in price goes directly into the Kremlin's swelling coffers and is a welcome addition after the severe economic recession in 2009. Second, the Libyan unrest has cut off the 11 billion cubic-meter natural gas (bcm) Greenstream pipeline to Italy, causing Europe's third largest consumer of natural gas to turn to Russia to make up the difference. Similarly, Japan's nuclear imbroglio has forced Tokyo to turn to Russian emergency shipments of liquefied natural gas (LNG) to fuel its natural gas-burning power plants.

But the most beneficial of all events for Russia may be the psychological effect that the Fukushima Daiichi nuclear power plant crisis is having on Western Europe. Germany's government announced on Tuesday that it would close seven nuclear reactors during a three-month period, reassessing the future of Germany's nuclear power industry. A looming Italian referendum on the government's decision to unfreeze nuclear reactor construction now seems all but guaranteed to fail. Criticism of nuclear power has swept throughout the Continent with the European Union energy ministers deciding on Tuesday to subject the bloc's nuclear reactors to a number of stress tests.

Europe's hydropower capabilities are at capacity, while coal-burning power plants are perceived as incompatible with the bloc's drive to reduce greenhouse emissions. The only alternatives left are renewable energy, which is slowly inching up in terms of overall electricity generation; nuclear power; and natural gas, which is seen as the much cleaner fossil fuel option to coal and oil. With fears about nuclear power returning to the Continent, it seems natural gas will be favored to fill the gap until renewable energy can become a larger part of the electricity generating mix.

As the world's number one exporter of natural gas - and with the world's largest reserves - this is very welcome news for the Kremlin. But for Russia, natural gas exports are about a lot more than just added revenue. For Russia, the natural gas exports are about control and political influence. Luring Western Europe toward greater energy dependency on Russia is ultimately about wrestling the region away from its post-WWII alliance with the United States. As the Middle East and North Africa continue to wrestle with unrest - again reminding Europe of the region's political uncertainty and fallibility as an energy exporter - and as Europe's populations are reminded of their fears of nuclear power, Moscow is taking stock of it all.

But Moscow is also interested in how the crises around the world are politically beneficial outside of the energy realm. First, the devastation in Japan has allowed Moscow and Tokyo to have a rare conversation about cooperation after years (if not more) of declining relations over an island dispute. Russia is magnanimously trying to show that it isn't such a bad neighbor to have, and is sending some of the larger amounts of aid, energy and rescue assistance.

The crises could also give Russia something it holds very precious - time. One of the reasons Russia grew so strong over the past decade is that its rival, the United States, was focused elsewhere. Moscow has been growing nervous in the past year knowing that Washington is starting to wrap up its commitments in the Middle East and South Asia. There is a discussion now rumbling through the Kremlin whether the events in the Middle East may keep the United States focused there a while longer, giving Russia even more time to cement its nearly dominant position in Eurasia. Thus far, the Kremlin must be satisfied with what the first three months of 2011 have brought in terms of its own strategic interests.

A Stratfor Intelligence Report.

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