Energy security and Russia’s gas strategy: The symbiotic relationship between the state and firms

Abstract

The way how Russia ignores the EU’s quest for liberalization and sustains a control over markets and supplies is directly related to her use of gas as leverage. Russia’s strategy affects many European and non-European countries during all stages: demand, supply and transit. It is not, however, possible to generalize a common statement that the EU’s position is based on a policy of market liberalization while Russia pursues an opposing strategy of increased state control. Russian energy strategy leads markets in Europe; sets tone for energy supplies at homeland and abroad, benefiting from a variety of means. This article shows how a symbiotic relationship between the Russian state and Russian energy companies emerge from a structure in which trade, markets and international politics have been embedded within the state interests and firm behavior. It identifies the economic and geopolitical trends with regard to recent developments of Russia’s strategy.