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Last Updated: Tuesday, 14 February 2006, 00:12 GMT
Russia wields the energy weapon
By Emma Simpson
BBC News, Moscow

When Russia turned off the gas to Ukraine, it sent shivers across Europe where customers are increasingly dependent on Russia to keep warm.

Crane installing part of the North European gas pipeline
A Baltic pipeline will open up a new gas link to Europe

It also set alarm bells ringing as politicians began to wonder if Russia could be relied on as an energy supplier.

Russia has vast reserves of energy. It is sitting on more than a fifth of the world's known reserves of natural gas and has at least 75 billion barrels of oil - about 7% of total world reserves.

But how much political power is this abundance of hydrocarbons bringing as well?

Russia has a significant amount of clout that derives from these statistics, says Cliff Kupchan, an energy analyst with the Eurasia Group.

"I would describe the mindset right now among the Russian political elite as infused with 'petroconfidence'. The problem is that petroconfidence can lead to an overstep. I think that Russia did that in Ukraine."

Charging full market prices was Russia's legitimate right, a move that is part of a strategy to end gas subsidies to former Soviet republics.

It is up to Western countries: To rely even more on the Middle East and Africa or to build stronger relations with Russia
Andrey Kokoshin
Russian MP
But it also showed Moscow flexing its political muscles, as Andrey Kokoshin, the head of the committee on CIS affairs at the Russian parliament, admits.

"Of course it is somehow connected with politics," he says.

"If the Ukrainian political elite, at least some part of it, decided to go with the West and not to integrate in the post-Soviet space, why should we subsidise the Ukrainian government?"

Political weapon

Could Russia play the energy card in a similar way with its most important customers in the West? Analysts think not. Using energy as a weapon is a dangerous card to play.

Saudi Arabia tried this tactic in the early 1970s in an effort to pressure America and the West on Israel, but this oil embargo backfired as it ultimately drove Western customers to look for other sources of oil.

Russia's political elite are all too aware of the risks. According to Cliff Kupchan, the Kremlin is using energy in different ways, depending on the arena.

"In Russia's near abroad, or post-Soviet space, it has used energy as a political weapon to achieve political goals. Ukraine is the key example. I think they have much more respect for the need to maintain stability with foreign partners, particularly Western Europe."

Dominant partner?

It is a mutually dependent relationship. Western Europe gets a quarter of its gas from Russia. It, in turn, is currently earning $25bn (14bn) a year from the trade.

It was not that long ago that Russia had to go cap in hand to the West for money. Now it is being courted by big, energy-hungry countries everywhere.

"Russia can accept the offers coming in from London, Frankfurt or New York - or from Beijing, Hong Kong or New Delhi. It is up to Western countries: to rely even more on dependence from the Middle East and Africa, or to build stronger relations with Russia," says Andrey Kokoshin.

By dint of the size of its reserve and its strategic location facing East and West, Russia could - if it continues on its current political path - become the dominant energy partner to the rest of the world.

Energy will bring Russia considerable political power. The world is waiting to see how that power is going to be used.

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