Page 4 - FSUOGM Week 34 2022

FSUOGM COMMENTARY FSUOGM

Russia's Asian oil and gas

pivot will take too long

Russia's pivot to Asia is naturally wise, but it will take time to reconstruct its
export infrastructure for the opposite direction, and the impact of sanctions

on financing and technology make the effort all the more harder.

RUSSIA RUSSIA is looking to fast-track its pivot to Asia IISS’ Survival: Global Politics and Strategy, “that
in order to offset the loss of revenues that its would require substantial capital and access to
WHAT: energy divorce with the EU is bringing about. energy technology at a time when sanctions pro-
Russia is accelerating But according to the International Energy hibit it.”
efforts to expand its oil Agency (IEA), in the best-case scenario it would “On top of infrastructure bottlenecks and
and gas exports to Asia. take the country at least a decade to ramp up gas logistical challenges, uncertainty surrounds
supplies to Asia to a level close to its 2021 exports Asia’s demand and energy security concerns,”
WHY: to the EU, which amounted to 155bn cubic Shagina writes. “Russia has become China’s
Infrastructure constraints metres per year. Diverting oil supplies eastwards largest oil supplier, surpassing Saudi Arabia.
and technological limitations will be easier, but will similarly take time. China has been quietly replenishing its strategic
due to sanctions will make Russia’s mostly Soviet-era gas export pipe- reserves, but Beijing would be wary of abandon-
its plans harder to realise. lines are largely geared to send supplies from ing its careful energy-diversification policy and
large fields in Western Siberia to Europe. Its only inordinately relying on Russia.”
WHAT NEXT: other options are expanded LNG exports, pri- Russia has already accounted for 18.4% of
In the coming years it marily from the Arctic, and an expansion in gas Chinese oil imports over the past year, even
will be unable to offset trade with China, through the development of though policymakers in Beijing have infor-
declines in westbound the Power of Siberia 2 pipeline, and additional mally limited reliance on any one country for
exports, with extra links. The IEA’s scenario assumes that Russia more than 15% of the total. Within this frame,
supplies to Asia only will successfully build and expand its gas infra- China could expand purchases of Russian gas,
kicking in later, towards structure. But as Dr Maria Shagina, at the Uni- which still only account for 7% of the overall
the end of the decade. versity of Zurich, notes in a recent article for volume, but Shagina noted that “even optimistic

P4 www. NEWSBASE .com Week 34 24•August•2022