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What is Putin trying to achieve? The Geo-political aspect of Russia’s gas counter-offensive

17.01.2006    source:
Taras Voznyak
An in-depth analysis of Russia’s economic and political objectives with the New Year Ukrainian gas crisis both as far as Ukraine is concerned, and in broader geo-political terms.

The gas war between Russia and Ukraine is not only, as might seem at first glance, a war between two countries. 

In December 2005 Putin’s Russia, with the help of its “hyper-monopoly” Gasprom, began a determined counter-offensive against Europe after two decades in retreat from the time of the collapse of the USSR.  Up until recently it lacked sufficient material, political and ideological resources for such an attack.

Russia’s retreat from Europe, after the success of its victory in World War II, has lasted 50 years already – there was the relinquishing of occupied Austria and the fiasco over Yugoslavia, then the retreat from the countries of Central Europe (East Germany, Poland, Hungary, Czechoslovakia, Bulgaria, Rumania) at the end of the 1980s, and also the loss of the Baltic States, Ukraine, Byelorussia, Moldova and the Caucuses after the dissolution of the Soviet Union at the beginning of the 1990s.

The era of Yeltsin’s Presidency has become fixed in the minds of the majority of Russians as a time of troubles. The traumatized consciousness of these Russians was inevitably designed to find as Russia’s heir to the “throne” an avenger, a person who would make up for the “humiliation” they saw themselves as having suffered over the past decades.

And just such a person emerged, naturally enough from the bosom of the KGB.  This person was Vladimir Putin. He was destined to emerge and indeed appeared thanks to conflict – the war in Ichkeria (Chechnya) and the apartment block bombings in Moscow. To ensure his success in the Russian consciousness, he needed permanent conflict and enemies of Russia assailing the country from all sides (with the turn now having reached Ukraine).

The appearance of such a “saviour of Russia” or “gatherer of the Russian lands” [1] coincided nicely with the highly advantageous for Russia rise in the price of energy resources.

Beginning with the oil crisis of the 1970s, and particularly from the 1990s, the world came face to face with the realization that the world’s energy supplies were a finite resource.  The main countries of the world understand that without control in one form or another of the key bases of energy resources, even their own further development, not to speak of their dominating role in the world, were simply impossible.

The main wars which are waged these days in various forms are wars about energy resources. Here we can cite the two Iraqi wars waged by the USA, and Russia’s two wars over Chechnya.

One should also mention in this connection the “confrontation of the civilized world with world terrorism”, for example, as seen in Libya, Iran and Ichkeria.  There is the transformation of a number of countries into “rogue nations”, as well as the fight to control the transport infrastructure of unstable countries, as for example Byelorussia and Ukraine.

Wars over energy supplies are not only wars for oil and gas fields, but also over the ways and means of transporting these resources.

The main energy bases in our region in the nearest future, aside from the countries of the Middle East, are Russia and the countries of Central Asia.  The Caspian Sea-Shelf is particularly promising.  It is for this reason that there is so much interest in cooperation with Azerbaijan, Iran, Turkmenistan and Kazakhstan.

These countries are typically not themselves players on the geo-political chessboard but rather objects of manipulation by main powers.  As a rule, the availability of energy resources or involvement in their transportation serves less to develop the country, than to preserve a puppet non-democratic regime. Possibly the only exception would be Norway.

The biggest consumer of energy in the world is the USA.  In second place to them, and the most dependent, is the European Union. Recently China has begun using more and more energy resources.

The EU is most dependent because its opportunities for receiving its own gas or oil are extremely limited in comparison to its requirements, while at the same time, one country – Germany – is attempting to reject atomic energy as an alternative.  Combined with this, the very success of the political program of the European Union in its economic competition with the USA, Japan and China depends on having adequate energy supplies.

The traditional source of energy supplies for the EU is the Middle East and Mahrib, this explaining France and Germany’s restraint on the subject of providing support for the USA in its war on Iraq.  They and the USA compete as consumers of these energy resources. At the same time, their oil and gas companies are competitors for control of oil and gas extraction in their regions.

The EU is attempting to get as close as it can to these treasures. Even allowing Turkey  to join the Union does not seem an unreasonable price to pay. The leaders of the EU are ready to pay even this price in order to reach the oil and gas fields in Iraq, Iran and Azerbaijan.

Another strategically important partner for the EU is Russia.  Russian gas and oil deposits are relatively close to its territory. Not only that, but they are also quite possibly the only major deposits which are not to some extent or other controlled by the USA (The USA’s attempts to gain control with the destruction of “Yukos” were a flop).

Moreover, Putin saw energy policy as being Russia’s final chance to once again become a real world power.  Particularly since the major part of Russian export is made up specifically of energy supplies, which also form the main source of State revenue for Russia.

 The country therefore has not only mobilized its entire energy business and transformed it into an instrument of State policy, but is also attempting through various means to gain control of the energy resources of its former colonies – Kazakhstan, Uzbekistan, Turkmenistan and Azerbaijan.

With a monopoly on the transportation of their energy resources to the EU and to the European States of the former USSR (including Ukraine), Russia is able to effectively exert influence on them, which it is successfully doing.

Russia is no less actively endeavouring to hinder attempts to redirect the movement of energy resources bypassing its territory.  The construction of a transport corridor Baku – Supsa has provided a hard knock to Russia’s monopoly in this sphere.  It will therefore apply all efforts to try to block the even more ambitious plan for transporting energy resources from Central Asia to its geo-political opponent – China.

With the implementation of these two major projects, the “Russian” direction for transportation of energy resources may become marginalized.  This will therefore marginalize Russia’s influence in this region as well, and thus Russia’s importance to the EU. It is this that Russia cannot allow.

The “energy-dependent” (not in the sense of consumption, but of export) structure of the Russian economy also forms “energy-dependent” Russian domestic and foreign policy.

The sensational “Khodorkovsky case” demonstrated the approximate means of resolving “business” issues inside Russia.  There is no obstacle which they would not be able to overcome.

Through the creation all around its periphery of such puppet regimes as in Byelorussia, Putin’s regime believes it is best ensuring that its new energy policy is controllable and unhindered.

Combined with this Russia has enjoyed considerable success in the European vector of its policy.  The majority of major European States, first and foremost Germany and France have tacitly abandoned efforts to democratize Russia itself.

The cynical “family friendships” of Putin and Schröder not only led to the signing of a bilateral agreement on the building of a North-European gas pipe along the bottom of the Baltic Sea and bypassing Ukraine, the Baltic States and Poland, but also marked out Putin’s Russia as the guarantor of stability in the region, thus perpetuating Lukashenko’s regime in Byelorussia.

In this the situation for Putin couldn’t have panned out better.  Not only is Germany a hostage in the energy field, but it has also become an instrument for carrying out Putin’s policy.  At a particular point Putin effectively began to manipulate the preferences of that country, at least as far as countries like Ukraine are concerned.

Failure for Putin came only with the “Orange Revolution” when Ukraine made an attempt not only to become more democratic, but also to break free of Russian control.

However Russia did not spend too long licking its wounds.

Russia’s large-scale operation in retaliation began with the conflict over the issue of gas supplies. However one can rest assured that it will not be limited to the gas issue alone.  The restrictions on import of Ukrainian pipes to Russia and the increase in the export duty on oil provide evidence of this.

Having assured themselves of the EU’s deep vulnerability as regards energy and having organized powerful political support for its policy in the economic and political establishment of a number of key EU countries (not excluding openly corrupt dealings), Putin decided with one blow to resolve several political and economic issues.

The first of these was to gain political control of Ukraine.  We can consider what was needed for this.

It was necessary to discredit the “pro-American” governments of President Yushchenko as risk-taking, incompetent and incapable of negotiating.  And most importantly, to present it as an unstable American puppet state which could choke the energy throat of the EU.

It was important to force Ukraine to take steps which the EU would deem inadequate – turn off the supplies of gas and oil,  extract gas or oil supposedly destined for the EU without sanction. This would present Ukraine as a zone of instability.

The very first step had to be raising prices on all energy sources. The oil crisis in Ukraine during the spring of 2005 was the first warning bell. However the Ukrainian government did not draw the appropriate conclusions and underestimated the determination of their opponent.

The oil crisis was planned on the eve of the peak period for oil consumption – at the beginning of the summer. Therefore the gas attack could have been anticipated to come on the eve of the peak of gas consumption – in December, as indeed happened.

If the oil crisis was talked about only in Ukraine, the gas attack was prepared as a large-scale show on the world stage.  It was good for these plans that Russia even in Yushchenko’s Ukraine has unlimited information resources and has not lost a scrap of the information base which it had under Kuchma.  

The show with turning off the gas was designed to demonstrate the determination and clout of Russia not just to Ukraine, but also to the EU, and to Russians themselves.

The show with turning off the taps was planned also as a means of intimidating and destabilizing Ukraine.  The government there was to be dismissed and the budget rejected.

In this the time was chosen very cleverly – Ukraine is undergoing a process of reform of the regime and is moving from a presidential to a parliamentary form of republic. In addition, an election campaign is beginning in Ukraine – the ideal moment for political revenge.

However the first reactions showed that no destabilization of society had taken place. The government did not fall, the budget was adopted. Even the anti-Yushchenko opposition responded in a reasonably lethargic manner, understanding that the main thrust of the offensive would hit eastern regions and their business.

Hysteria was for the time being seen rather on the Russian side. The resource of gas-related blackmail was for the moment insufficient to bring about the full destabilization of Ukraine.

Entirely sufficient, however, to ensure that Ukraine was discredited before its partners from the EU.

Ukraine could not transport gas to the EU free of charge and had every right to extract gas as payment for its transit in accordance with previous agreements. This would inevitably reduce the supplies of gas to the EU and this was what Russia needed in order to discredit Ukraine.

Such a loss of reputation for Ukraine as a country providing transport would of course accelerate the process of building alternative gas and oil pipes bypassing its territory.

Together with this it was an enormous weapon for influencing the elections in Ukraine. The halt called to energy-consuming industries in the east of the country could even more strongly mobilize the already fairly mobilized electorate of Yushchenko opponents which, together with the changes to the power structure and the election of a new prime-minister and speaker of the Verkhovna Rada with much greater powers, would effectively achieve retaliation for the Orange Revolution.

However the main political aim of Putin’s regime was to block Ukraine’s entry of NATO and to stall Ukrainian integration into the EU.  This is because Ukraine’s joining NATO is not only the USA’s prerogative, but also that of other members of NATO.  This was also to be the price that Putin would soon demand from Ukraine.

The price for Russian gas which was in no way economically justified was purely a pretext.  The frenzied anti-NATO propaganda of  Putin’s faithful supporters from the anti-Yushchenko camp in the Ukrainian political milieu was highly indicative.

One of the secondary aims of the gas attack was also the attempt to reduce American influence in Central Europe which is particularly strong in Ukraine, Poland, the Baltic States and other new members of NATO.

Combined with this there were also some purely technical aspects to Putin’s gas attack.

Of these the main one was to gain full control over Ukraine’s gas transportation system. Raising the price of gas was intended to lead to the Ukrainian gas transportation infrastructure being handed over to Russia. This would remove Russia’s technical dependence on Ukraine in the area of gas transportation.

The possible next step was to be taking over Ukraine’s oil pipe infrastructure. However this will be the next “surprise” for the Ukrainian government in spring 2006.

Moreover, whereas if in the gas conflict Ukraine can force the EU to moderate the Russian appetite, because both Ukraine and the EU are sitting on the same pipe, in the case of oil pipes, Ukraine will be more alone.

What reactions can one expect from the main geo-political players?

Russia will act with a view to the reaction of the USA and the EU. Today’s gas crisis is a trial shot sent by Russia.  A particular touch to this whole situation can be seen in the fact that the scenario was planned on the eve of the summit of the Group of Seven + Russia in Moscow.  A move worthy of Machiavelli himself.

The USA is clearly not eager for such an increase in activity of Russia in the whole region and will therefore put pressure on Putin.  For them, what is at threat is not just the new democracies in the post-Soviet expanse, but also the entire geo-political concept they have developed.

In the case of a collapse of democracy in Ukraine, which is fundamental for the USA, the entire plan for democratization (of in particular Byelorussia and Russia) could be ruined.

The next thrust could be aimed at the American influence and energy interests in the Caucuses and Central Asia. However, this is of course not an issue of democratization.

The EU may be divided in their response. Germany, represented by the new Chancellor Angela Merkel is fairly consistent in accentuating the great importance of Russia and says nothing about Ukraine. The countries of Central Europe are more likely to be on Ukraine’s side, although they will express this cautiously. 

However the Ukrainian government in this situation will need to show two mutually exclusive virtues – decisiveness and flexibility.

[1]  This is a term often used about Ivan III who began Muscovy’s expansion and consolidation.  (translator’s note)

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