American Foreign Policy Council

Russia Reform Monitor: No. 1602

October 31, 2008 Ilan I. Berman
Related Categories: Arms Control and Proliferation; Energy Security; Africa; China; Russia

October 24:

Russian Foreign Minister Sergei Lavrov is warning the Bush administration that its decision to extend U.S. sanctions on state arms trader Rosoboronexport for continuing to trade with Iran could have dire diplomatic consequences for U.S.-Russian relations. “This is absolutely incompatible with the new realities in the current world structure,” Lavrov announced in a televised address following reports of the extension. "We will take this into account in our relations with the United States.” Rosoboronexport officials, meanwhile, are taking issue with the nature of the sanctions themselves, which are intended to penalize entities that “make a material contribution to the development of weapons of mass destruction or cruise or ballistic missile systems” of Iran. “We’re not some dodgy shop," spokesman Vyacheslav Davydenko has told the Moscow Times. "We are a government intermediary and follow all international laws and UN resolutions."

Nor are the U.S. measures likely to make a real dent in Rosoboronexport's business, experts say. “Commercially, Rosoboronexport has no strong interests in the U.S. market,” according to Viktor Mizin of the Moscow State Institute for International Relations. “Our biggest arms buyers remain China and India, followed by Middle Eastern and Latin American countries.”


October 28:

Russia and China have come to terms on a new pipeline that will dramatically increase Russian energy supplies to the PRC. According to the Agence France Presse, the agreement was signed by representatives of China's CNPC and Russia's Transneft following talks between Russian prime minister Vladimir Putin and his Chinese counterpart, Wen Jiabao. The new pipeline would be an offshoot of the Russia's East Siberia-Pacific Ocean pipeline, now under construction. No firm date for construction of the the 70-kilometer spur has yet been agreed upon by the two sides, but if built as envisioned the pipeline would bring up to 15 million tons of oil a year from the Siberian town of Skovorodino to the Chinese border, where it would link to China's existing national pipeline network.

[Editor's Note: The move marks a significant conceptual reversal on the part of the Kremlin. For years, worried that China's voracious appetite for energy might overwhelm their country's plans for diversified export, Russian officials have steered mostly clear of permanent energy links with the PRC. As a result, Russia today is only the fifth-largest exporter of crude to China, despite its geographic proximity and energy wealth. But hard economic times - and the plummeting price of world oil - appear to be prompting a strategic rethink in Moscow, much to Beijing's benefit.]


November 1:

In his first visit since Soviet times, Libyan leader Muammar Qadhafi has landed in Moscow for talks with Russian President Dmitry Medvedev. The goal of Qadhafi's visit, his first since 1985, appears to be to secure a strengthening of energy ties between Tripoli and Moscow. "Libya and the Russian Federation are major producers of oil and gas and we included in our delegation the chiefs of our national oil company to discuss questions of co-ordination with their Russian colleagues," Qadhafi has told reporters in comments carried by the BBC. "Co-operation between our two countries in the oil and gas areas is particularly important in the present situation."

In exchange, the North African state could soon become a Mediterranean base for Russian forces. "Libya is ready to host a Russian naval military base," Defense News cites the Russian daily Kommersant as saying. "The Russian military presence will be a guarantee of non-aggression against Libya from the United States, which is not in a hurry to embrace Qadhafi despite gestures of reconciliation."

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