Category Archives: Energy Diplomacy

Azerbaijan and Serbia Expand Defense Partnership

Presidents of Azerbaijan and Serbia made press statements

Publication: Eurasia Daily Monitor Volume: 21 Issue: 31

On February 6, Serbian President Alexander Vučić confirmed that Serbia signed a new defense contract worth over $300 million with Azerbaijan for Serbian-produced NORA B-52 (155 millimeter) self-propelled artillery (DefenseMirror.com, December 13, 2023). While Western media was surprised to hear about the new defense contract, it was not a surprise for Azerbaijani society, given the recently deepened strategic partnership between Azerbaijan and Serbia. For example, in November 2023, both countries signed a new energy deal to deliver Azerbaijani natural gas to Serbia (Balkan Insight, November 15, 2023). In the same period, Azerbaijani company AzVirt started the construction of the high-speed highway Slepcevic-Badovinci, which was 15.4 kilometers near Shabac (ABC.az, November 29, 2023). The most recent Serbian-Azerbaijani arms deal is a logical continuation of the earlier agreement regarding military-technical cooperation that consistently asserted mutual respect for each other’s territorial integrity as the framework for collaboration between the two ministries in the military-economic and military-technical sphere (The Government of Serbia, October 11, 2021). Continue reading

What to expect if Bulgaria expels Lukoil

COMMENT: What to expect if Bulgaria expels Lukoil

Russia’s unprovoked invasion of Ukraine in February 2022 had unpredictable repercussions in the global energy market. Although EU countries significantly decreased reliance on Russian oil and, to some extent, Russian gas, the Kremlin still maintains limited influence in some EU countries, including Bulgaria. Since the EU imposed an energy sanctions package on Russia, Bulgaria was granted a two-year exemption from Europe’s embargo on Russian oil until December 2024. Continue reading

Azerbaijan’s energy diplomacy pivots to the Balkans

OPINION: Azerbaijan’s energy diplomacy pivots to the Balkans

Azerbaijan has adjusted its foreign policy agenda to target the Balkan region, that is more vulnerable to the energy crisis than the states of Central and Western Europe.

Energy has long been the core element of Azerbaijan’s pragmatic foreign policy, and recently it gained more impetus as European nations sought additional energy suppliers to replace Russian fossil fuel exports. Although the EU’s leading member countries are able to compensate for energy shortages by using energy reserves, employing alternative energy sources and importing additional gas volumes from alternative suppliers, the less developed Balkan states are struggling to adapt to the energy deficit.

More gas for the Balkans

On April 26, a signing ceremony for the memorandum of understanding on encouraging cooperation among Bulgartransgaz (Bulgaria), Transgaz (Romania), FGSZ (Hungary), Eustream (Slovakia) and the State Oil Company of the Azerbaijan Republic (SOCAR) was held in Sofia. The memorandum paves the way for additional Azeri gas volumes to flow to the Balkans amid the unprecedented energy crisis in Europe caused by Russia’s invasion of Ukraine. Moreover, the document highlighting Azerbaijan’s strategic partnership with the Balkan nations will ease the cooperation between the local authorities and the transmission and distribution system operators. Continue reading

Gas crunch emerging in East as Kazakhstan fails to meet China’s import requests

Gas crunch emerging in East as Kazakhstan fails to meet China’s import requests

The global energy crisis that is so apparent in the West is now becoming that much more visible in the East. Kazakhstan, one of the leading crude oil and gas suppliers in Asia, has announced that it intends to gradually decrease its natural gas flows to China, citing domestic consumption rising at what could become a crisis-inducing rate.

In June, Kazakh President Kassym-Jomart Tokayev ordered the government to cut gas exports and ensure that an additional 2bn cubic metres (bcm) of gas were available to consumers inside Kazakhstan. Tokayev said meeting domestic demand for gas must be held as an absolute priority over exports, with the gas to be sourced from the Tengiz field developed by a consortium led by US energy giant Chevron. Continue reading

Amid global energy crisis Balkan states reach out to energy-rich Azerbaijan

Amid global energy crisis Balkan states reach out to energy-rich Azerbaijan

With the deepening energy crisis in the West triggered by Russia’s intervention in Ukraine, more European countries, mainly Eastern European and Balkan countries, including Bulgaria and Serbia, are eyeing alternative suppliers for additional natural gas volumes. The security cataclysms in Europe in the light of the war have pushed European countries to seek partners such as Azerbaijan.

Since 2022, Azerbaijan has held several high-level meetings with EU officials regarding exporting additional gas volumes to Europe. It is noteworthy that non-EU countries like Serbia are also keen on deepening energy partnerships with Azerbaijan. Serbia’s willingness to acquire more Azeri gas depends on the construction progress of the EU-supported Serbia-Bulgaria gas interconnector – a 171 km natural gas interconnector that will connect Nis (Serbia) and Sofia (Bulgaria), thus supporting regional energy security. According to reports, the interconnector may become operational in early 2023, giving Serbia and Bulgaria a non-Russian gas supply option. Obviously, Serbia is heavily dependent on Russian oil and gas, which have been disrupted following the Ukraine war and the imposition of sanctions on Moscow by the European Union, which Serbia is seeking to join. Continue reading

Algeria Makes for a Risky Partner to Help Solve Europe’s Energy Crisis

Italy signs deal with Algeria to increase gas imports | News | Al Jazeera

The war in Ukraine has exacerbated Europe’s energy crisis, leaving the European Union desperately seeking alternative sources of supply to reduce its dependence on Russian fossil fuels. Among the states in the Middle East, North Africa and Central Asia the EU has turned to in efforts to diversify its energy supplies, Algeria has been identified as a promising source of additional supplies of natural gas. But diplomatic obstacles and production limitations, as well as Algiers’ commercial links to Moscow, mean that expectations management are in order when it comes to Algeria being a cure for Europe’s energy woes.

Among the other countries that have been identified as potential alternative suppliers, including Qatar and Libya, most would not able to replace Russian natural gas exports to Europe anytime soon due to technical obstacles. Germany is in talks with Qatar for additional liquefied natural gas, or LNG, exports, but those discussions have reportedly hit a snag. Azerbaijan has also agreed to increase deliveries through available pipelines linking its fields to European markets, but there are limits to the amount of extra production it can divert. Continue reading

How Will the Ukraine Crisis Shape the World Energy Market? [Politics Today]

Ukraine war: Can Russia's promise of fewer attacks be trusted? | Russia-Ukraine  war News | Al Jazeera

The Russian military aggression against Ukraine launched almost two months ago has clearly signaled a change in the traditional world order and triggered the unprecedented reaction of the Western coalition led by the U.S. The ongoing conflict between Russia and Ukraine has left the global energy market uncertain, threatening to cause severe energy shortages and oil prices exceeding $110 per barrel.

Since the Russian intervention in Ukraine kicked off, numerous sanction packages have been imposed on Russia, hitting mostly financial institutes and state-owned companies. This resulted in Western countries’ consolidation, and the collective refusal of Russia-related transactions and import of Russian natural gas, oil, and coal.

Whereas the U.S. and UK-led Western coalition gathered to support Ukraine politically, economically, and military/technically, some EU countries are at loggerheads over demands for an immediate blockade on Russian oil imports, joining the international financial sanctions, and condemning Moscow’s actions locally.

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Could the Israel-Turkey Gas Pipeline End Europe’s Dependence on Russia? [Inside Arabia]

Could the Israel-Turkey Gas Pipeline End Europe’s Dependence on Russia?

The prospect of Israel and Tukey normalizing relations paves the way for profitable cooperation in a wide array of fields, including energy. Israeli President Isaac Herzog’s visit to Turkey in March instantly renewed the discussions regarding the Turkey-Israel gas pipeline project amid a colossal security cataclysm in Europe stemming from Russia’s invasion of Ukraine. While Europe is facing unprecedented energy security challenges and desperately looking for alternative and reliable suppliers, the countries are looking to the Turkey-Israeli gas pipeline as Europe’s alternative to Russian energy supplies.

President Recep Tayyip Erdogan’s earlier statement that “gas cooperation is one of the most important steps we [Turkey and Israel] can take together for bilateral ties” should not come as a surprise. Erdogan also said “he was ready to send top ministers to Israel to revive the pipeline idea that has hung in the air for years.” Continue reading

How Will the New China-Russia Gas Deal Affect the Ukraine Crisis? [Politics Today]

Russian President Vladimir Putin (L) and Chinese President Xi Jinping (R) meet in Beijing, China on February 4, 2022. Photo by Kremlin Press Office

Russian President Vladimir Putin (L) and Chinese President Xi Jinping (R) meet in Beijing, China on February 4, 2022. Photo by Kremlin Press Office

Amid escalating tensions between Moscow and the West over Ukraine, Russian President Vladimir Putin paid an official visit to China to finalize the negotiations over a new $80 billion natural gas agreement. On February 4, Gazprom signed an agreement with China National Petroleum Corporation (CNPC) to supply Russian gas to China via the Far Eastern route for the next 25 years, which will boost Russian gas volumes to China by an extra 10 billion cubic meters (bcm) a year.

Unlike the previous Russia-China gas agreement on the Power of Siberia pipeline, which is being built for the last five years, the new agreement does not entail the construction of an additional pipeline network. Although the Western media dubbed this agreement unexpected, the negotiations over the agreement lasted six years and resulted in the signing of memoranda of understanding in 2015 and 2017, respectively. Russia has long aimed to capitalize on its vast hydrocarbon resources to cater to China’s increasing liquefied natural gas (LNG) demand. The agreement was signed at a time of an uneasy geopolitical situation between the U.S. and Russia over Ukraine, which prepares for the full-scale war with Russia. In this vein, it is significant that the new gas agreement was settled in euros in an effort by both Moscow and Beijing to diversify away from trade in U.S. dollars.

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Europe Won’t Make Up for Shortfalls of Russian Gas Easily [World Politics Review]

Photo credit: CNBC News

Photo credit: CNBC News

The current crisis between Russia and Ukraine has put the United States and its European allies on high alert over the possibility of the first major interstate military conflict in Europe since World War II. Although efforts to find a diplomatic resolution to the crisis continue, the room for a mutually acceptable outcome has narrowed now that the U.S. and NATO have rejected Russia’s demands that no additional NATO troops be deployed to Eastern Europe, while continuing to provide arms and other aid to Ukraine.

Apart from the concerns the crisis has raised over European security and Russian revanchism, Europe is also particularly alarmed about the potential for major disruptions in its energy market, which is highly dependent on Russian oil and gas. Indeed, a military invasion of Ukraine could create an energy catastrophe in Europe if it results in Russian gas exports being cut entirely. The diplomatic fallout from an invasion could also trigger the cancellation of current energy projects within the European Union, such as the Nord Stream-2 pipeline to Germany, which would have long-term implications for European energy supplies. Continue reading