The Geopolitical and Economic Importance of Energy Rich Central Asia: Possibility of an EU-Russia Alliance

Abstract

The scramble for oil and influence by the big powers in the Caspian Sea region has been likened to the Middle East in the 1920s. But in today’s Central Asia there is an even larger and more complex quagmire of competing interests. There are the big powers such as Russia, the EU, the US; the neighbours such as Iran, Pakistan, Afghanistan and Turkey; the Central Asian states and the most powerful players of all, the oil companies, competing in what we call “The New Great Game.”The Caspian sea basin has tremendous potential, offering the possibility of production increases from 1.6 million barrels a day (b/d) in 2001 to 5.0 million (b/d) in 2010.In an emerging multipolar world, the prime source of intractable conflicts and a formidable political and diplomatic weapon in the hands of states will be energy sources and pipeline routes. As energy is not just a commodity but a need, Europe wants security of supply. Russia on its part wants security of demand. Russia needs European upstream investment in its energy sector, while itself seeking to invest in downstream markets in Europe. For the European Union the key strategic challenge is its dependence on Russian gas.In the twenty first century an enduring goal is a long-term partnership, built around reaching economic integration embracing the whole of the European continent, including Russia.