CRS Report for Congress
Prepared for Members and Committees of Congress

Russian Energy Policy Toward Neighboring
Countries
Steven Woehrel
Specialist in European Affairs
May 20, 2009
Congressional Research Service
7-5700
www.crs.gov
RL34261
Russian Energy Policy Toward Neighboring Countries

Summary
Russian oil and natural gas industries have become key players in the global energy market,
particularly in Europe and Eurasia. Another trend has been the increasing concentration of these
industries in the hands of the Russian government. This latter phenomenon has been accompanied
by an increasingly authoritarian political system, in which former intelligence officers play key
roles.
Russian firms have tried to purchase a controlling stake in pipelines, ports, storage facilities, and
other key energy assets of the countries of central and eastern Europe. They need these assets to
transport energy supplies to lucrative western European markets, as well as to secure greater
control over the domestic markets of the countries of the region. In several cases where assets
were sold to non-Russian firms, Russian firms cut off energy supplies to the facilities. Russia has
also tried to build new pipelines to circumvent infrastructure that it does not control. Another
objective Russia has pursued has been to eliminate the energy subsidies former Soviet republics
have received since the fall of the Soviet Union, including by raising the price these countries pay
for natural gas to world market prices.
It is not completely clear whether the pursuit of Russian foreign policy objectives is the primary
explanation for the actions of its energy firms. Few would disagree in principle that the
elimination of subsidies to post-Soviet countries is a sound business decision, even if questions
have been raised about the timing of such moves. Even the pursuit of multiple pipelines can be
portrayed as a business decision. On the other hand, many countries of the region are concerned
that Russia may use their energy dependency to interfere in their domestic affairs or to force them
to make foreign policy concessions. Countries of the region also fear that by controlling energy
infrastructure in their countries, Russian energy firms are able to manipulate the internal political
situation by favoring certain local businessmen and politicians. However, the current global
economic crisis has hurt Russia's energy firms and Russia's international clout, as energy prices
have tumbled.
Bush Administration officials repeatedly criticized what they view as Russian efforts to use its
energy supplies as a political weapon. The Obama Administration, like its predecessor, has urged
European countries to reduce their dependence on Russian energy. The United States has strongly
advocated the building of multiple pipelines from Central Asia and Azerbaijan to Europe.
Members of Congress have also expressed concern about the impact on European countries of
their dependence on Russian energy. In the 111th Congress, committees have held hearings that
have touched on the issue. Congress has also passed resolutions that refer to worrisome aspects of
Russian energy policy. Related CRS products include CRS Report RL33212, Russian Oil and
Gas Challenges, by Robert Pirog, and CRS Report RL33636, The European Union's Energy
Security Challenges, by Paul Belkin.