The Carnegie Moscow Center hosted a discussion on the changing global energy market at a time of abundant supply and high policy uncertainty, particularly in regards to American energy politics under the Trump administration.
Authors of more recent studies almost unanimously state that even though it’s unclear whether the resource curse generally menace on average over the group of resource-rich countries, it definitely threatens nations with weak institutions.
Carnegie Moscow Center hosted a discussion on the impact of resource dependency on the economic development of Russia and other major petrostates in a comparative context.
Achieving economic diversification in countries dependent on oil exports is a major challenge. Most diversification strategies have failed, and there are no examples of countries that have successfully managed to fully diversify away from oil.
Between the end of World War II and the mid-1960s, the Soviet Union’s economy was one of the most vibrant in the world. The country had successfully launched the first man into space and was competing with the United States in developing cutting-edge military technology. However, by the end of the 1980s, the economy was in a miserable state.
If explained in details and promoted by the Russian and Bangladeshi authorities, solutions about water supply, spent nuclear fuel, and security could end some concerns and fears about the Rooppur NPP and help create a friendly environment around this project.
The main obstacle to energy negotiations between Russia and the EU is the clash between their perceptions of energy security. Moscow claims that the biggest threat to European energy security is Ukraine’s unreliability as a gas transit country, while Brussels believes the construction of new Russian pipelines circumventing Ukraine will do nothing to improve the EU’s energy security.
Unlike Russian gas pumped via Ukraine and Germany, that flowing through Turkey will face tough competition from Azerbaijani, Iranian, Iraqi, and possibly even Turkmen and Israeli gas. Gazprom’s rivals won’t need to ship their gas as far, and they will have much lower pipeline construction costs. The gas market in southeastern Europe is not that big and doesn’t have a lot of room for growth.
Why is Gazprom selling gas to Europe below cost? So that companies from the United States and other countries do the same, fall into a price war, and eventually go broke.
The construction of a new pipeline that will send Caspian natural gas to southern Europe is making Gazprom executives uneasy. Once the pipeline is completed, Gazprom will lose its monopoly in southern Europe and may have to resort to price dumping to stay competitive.