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Belarus Plays Hard to Get with Russia and Europe

Jeffrey Mankoff’s article this week in Foreign Policy does a good showing why there isn’t really a good guy or a bad guy in the current energy face off between Russia and Belarus, but Europe should really be concerned about its outcome.  As the last dictator in Europe, Alexander Lukashenko can still pull some surprising moves to play Europe off on Russia and Russia off on Europe, but for how long?

But though moving to market rates for energy makes sense in theory, put in practice by the Putin regime it has only contributed to uncertainty among the European states that purchase most of Russia’s energy. Market rates have been introduced for different post-Soviet states at different times, depending in large part on the purchaser’s relationship with Moscow. For Belarus, loyalty has long translated into some of the lowest energy prices of any Russian neighbor, even as Russian gas monopoly Gazprom and Transneft have ratcheted up prices on Ukraine and other states that have sought to leave the Russian orbit. With Belarus increasingly aware that its dependence on Russia has left it isolated and vulnerable, it too is finding that foreign-policy flexibility comes with a price.

Moscow’s long-term goal is to take control of energy distribution infrastructure throughout the former Soviet Union. This aim is clearly stated in Russia’s energy policy, and the previous round in the dispute between Belarus and Transneft-which also sparked a brief cutoff of Russian oil supplies-was ended in part by an agreement for the Russian pipeline monopoly to take a 50 percent stake in Belarusian pipeline operator Beltransgaz. Gazprom has exerted similar pressure on Ukraine over Kiev’s outstanding debts. If Moscow were to succeed in completely taking over the Belarusian energy distribution network, it would not only be in a stronger position to influence Minsk’s foreign policy, but the move would also improve Moscow’s market power, and hence its political leverage, vis-à-vis Europe. Uncertainty about deliveries through Belarus could also lead to higher global oil prices, just as Western economies are beginning to emerge from the recession. That in and of itself should be reason enough for the Europeans — and their U.S. allies — to pay close attention to a seemingly obscure customs dispute.