Russian G8 Summit - Beginning Of A New Era

Finance Ministers from the G8 recently held two days of discussions in Moscow. The focus was the Kremlin's growing clout in world oil and gas markets. This wass Russia's first time as chair of the group meetings. With growing energy concerns, shifting patterns of power, and rapid growth of China, India, and other expanding economies, this is perhaps the beginning of a new era. The diverse agenda included talk about world trade, debt relief for poor countries, fighting infectious diseases and terror financing, but observers expect energy issues will continue to dominate these and future discussions. Along with its other G8 partners --- Britain, Canada, France, Germany, Italy, Japan and the United States --- Russia invited Brazil, China, India and South Africa, recognizing their rapidly growing clout in financial circles. **Global Energy Security Russia singled out "global energy security" as the focus for discussion at these meetings, and, in fact for its entire G8 presidency. One particularly contentious issue is Russia's offer to setup a uranium enrichment center for use by nations needing nuclear fuel for power production. Russian President, Vladimir Putin expanded on this offer in a news conference held Jan 31. The suggestion is seen as a compromise in the Iran standoff over Tehran's continuing nuclear research program. The Russian offer would potentially remove the need for countries like Iran to conduct controversial research that could also be used to build nuclear weapons. **Dependable supplier of oil and gas With Russia's growing role as a supplier of oil and gas to Europe, another of Putin's primary objectives is to emphasize Russia is a dependable energy partner with huge reserves, in a time when Middle East volatility is rising. Its recent dispute with Ukraine over gas prices did not help bolster the image of Russian dependability. That dispute disrupted supplies to other European clients downstream when Ukraine temporarily turned off the pipelines. Another concern is Russia's reassertion of state control over energy resources. This move links the dependability of Russian energy supply to the politics of the day. This is normally seen by western global customers as an attempt to create levers for furthering the supplier state's political agenda, and prying control away from multinational corporations. Given the current state of oil supply in the world, Russia is unlikely to be bullied on this matter. This is especially the case if emerging giants like China and India are sympathetic to attempts to break Western control over oil supply. As Russia continues to flex its muscles on energy issues, the global power balance between energy users and producers continues to shift. For decades the major industrial powers have used western controlled multinational corporations to control world supply of oil and gas. But Russian state control of supply and delivery systems could signal a signicant shift in this pattern.