Russia’s recent power play in the Ukraine flagrantly violates a raft of international laws and is the boldest of President Vladimir Putin’s many provocations. The Crimean peninsula is now firmly under his control. His claim that the Russian-equipped occupiers are acting independently insults the intelligence of Western leadership, whose response has been decidedly feeble thus far. He is now licking his lips over Eastern Ukraine and has received rubber-stamp approval to intervene anywhere in the country.
Putin often looks more like an opportunistic thug than a master strategist, and making sense of his aggression can be difficult. His foray into Ukraine could reflect ambitions to form a Eurasian barrier against NATO’s advance. However, suggesting that the former KGB spy has a master plan lends undue legitimacy to his bullying. Reducing the level of analysis may therefore be appropriate. Doing so highlights connections between the crisis and the European natural gas market, in which Russia is the dominant player. While one must avoid erroneously connecting dots, it is useful to observe them: Ukraine is a gateway between the gas fields of Russia and the markets of Europe, and the country’s delinquent gas payments have proven seriously disruptive to energy markets.
The Russian Federation provides around 40 percent of European natural gas through pipelines, around 80 percent of which pass through Ukraine. Although it enjoys some of the lowest prices in Europe, absurd subsidies have rendered the country perpetually indebted to Russia. Chastened by this for years, Russia has cut off Ukraine’s supply twice since 2006, and has accused it of illegally siphoning gas. Matters came to a head in January 2009 when the dispute led to major supply disruptions and cutoffs in 18 European countries. Some politically expedient (and comically near-sighted) maneuvers have staved off conflict since; however, the billions in debt still fester on the Ukrainian books. This situation is untenable for all parties, as Europe wants steady gas and Russia steady revenue (the country’s gas giant, Gazprom, is state-controlled and massively corrupt).
In this context, the timing of the current conflict is suggestive. On Nov. 21 of last year, Ukrainian president Viktor Yanukovych surprised the world by spurning an EU trade deal, instead of cozying up to Moscow. This was right before the winter months would raise the presence of debt wrangling and shivering Ukrainians. This was a big win for Putin, who relishes any rebuke of the Western coalition, until it sparked Yanukovych’s ouster by popular uprising. Predictably, the interim government in Kiev is decidedly Western-leaning. This is a blow both to Putin’s reputation and his level of control over Gazprom’s path to Western markets.
Shortly after Yanukovych’s flight, alarming reports of the Crimean occupation and pro-Russian unrest in Eastern Ukraine, surfaced. The culprit was immediately known, and Western leaders began their pitiful rhetorical bombardment against Mr. Putin. The lip service hardly intimidates the Russian czar and serves only to deflate confidence in Western resolve. Once again, Mr. Putin is staring us down, and NATO appears ready to deliver a unified blink. We appear to be retreating from another “red line,” this one set in the Budapest Memorandum, where we vowed to protect Ukraine in exchange for their surrender of nukes to Russia.
The inaction could be an innocent lack of political will. I admit Russia’s latest irredentist adventure is hardly worth starting World War 3 over. With that being said, there are plenty of ways to hurt the Russian oligarchy without military action. Some of these methods include the financial sanctions that dismantled the Iranian economy, Thus far, however, leaders have balked at making any concrete threats, instead sticking to talk of ambiguous “costs.” After all, Moscow extending its control over crucial natural gas pipelines could bring some security to gas markets in Europe. As an added benefit, the West doesn’t have to find out if a provoked Mr. Putin is willing to tighten the valve, so long as it keeps twiddling its thumbs. While this fact may be only a small part of the picture, it is hard to overlook.