Publications

04.08.2017

Russia, the US and the prospect of cooperation on gas supply

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Few know the content of this month’s maiden powwow between Trump and Putin. Yet given Trump’s suggestion that the US is open for business in Europe regarding natural gas, it would be odd if the Russian leader hadn’t brought up the subject of his country’s standing as one of the region’s main suppliers.

Speaking directly to the people of Poland earlier that week, Trump raised a few eyebrows by stating that the US was «committed to securing [their] access to alternative sources of energy so Poland and its neighbours are never again held hostage to a single energy supplier.»

Commentators are asking if this was a direct attempt to cut into Russia’s foreign influence by weakening their grip on the European gas market, or was this simply another example of President Trump speaking off script?

In a Q&A with Energy Voice, former Russian Energy Minister Igor Yusufov pointed squarely to the effect of Obama-era US sanctions and Russia’s reliance on expertise and technologies from abroad, mainly from the US, as having had a slowing effect on his country’s ability to capitalise on natural gas reserves.

Yusufov believes a new relationship with the US is possible and that the 2 world powers working together could boost natural gas sales oil and invigorate the market.

He said: «Unfortunately the Obama administration left a diverse heritage of unsolved and artificially created problems in bilateral relations. There is no doubt that the pragmatic orientation on American policies proclaimed by President Trump would face a crucial test on the approach towards energy cooperation with Russia.»

While clearly hoping that a Trump presidency can strengthen relationships between the 2 countries, the comments made during the US President’s Warsaw speech will surely be viewed by some as an opportunistic attempt to encroach on a recent Russian energy success story.

Putin’s spokesman shrugged off Trump’s comments, stating: «There’s no energy monopoly in Europe… all this will be decided by the market, it should not be decided politically».

The previous week, Rick Perry, Trump’s energy secretary, suggested the US should use its cheap natural gas for diplomatic purposes in the aftermath of their pulling out of the Paris Climate Agreement.

He said: «We are in a position to be able to clearly create a hell of a lot more friends by being able to deliver to them energy.»

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Asked whether Donald Trump is declaring the US open for business within Europe’s natural gas market, Joseph Grinkorn, chief executive of The Morris Group, said: «Yes he is. Trump has continuously said that he wants to make the US a global energy leader and if we have the resources we should use them. A big part of Trump’s campaign was making the US energy independent, and by that making other countries buy from us as well. At the same time with all that’s been happening with Russia over the last few years a weaker Russian influence is better for all, especially their neighbours.»

 Yusufov, a Russian politician and businessman steeped in the discipline of energy, is aware that the US has an influence on Russia’s continued energy growth – and seems to welcome it – but can’t ignore the fact that sanctions on his country put them at a clear disadvantage.

He said: «The general observation is that Russia has huge and promising projects to offer, and American companies have immense expertise and effective technologies. But as long as politically motivated sanctions dominate economic questions, there will be no mutual economic benefit from the cooperation.»