May 18, 2013
Russia’s “no” vote on the latest United Nations Security Council resolution condemning the civil war in Syria is the most recent display of Moscow’s seeming indifference to the never ending violence plaguing its longtime Middle East ally. While the EU and US push for more international effort in resolving the conflict, Russia insists on Syria’s sovereignty.
The Kremlin’s staunch opposition to international intervention seems excessively obstructionist given the magnitude of the crisis in Syria, even considering the nostalgic reasons it may have to prop up the Assad regime. However, a look at Russia’s sources of state funding reveals that domestic concerns may be the real reason for President Putin’s niet.
Oil and gas revenues account for more than half of Russia’s federal budget, which funds an increasing number of subsidies and welfare pledges intended to dissuade political unrest. Russia’s control of most gas pipelines to Europe allows it to keep gas prices high enough to sustain domestic spending, but oil prices are determined by the world market. With such a high dependency on energy revenues, the Kremlin is especially vulnerable to oil price declines and has every interest in keeping market prices high. Turmoil in a Middle Eastern country affecting everything from Arab-Israeli relations to Iran’s willingness to close the Strait of Hormuz is quite the perfect storm to keep markets anxious.
Of course, budget concerns are not the only factors playing into Moscow’s strategy towards Syria. The Assad regime is an important customer for Russian-made weapons, and Syria hosts Russia’s only Mediterranean naval base. The prospect of NATO bombing campaigns following any UN resolution that could be interpreted as approving military intervention, as was the case in Libya, deeply troubles the Kremlin. Nevertheless, Russia’s staunchness suggests that a major reason for its stance is existential in nature.
As border skirmishes with Israel and Turkey threaten to export Syria’s chaos to the wider region, one would think that Russia’s obstructionism is paying off. In reality, oil prices are decreasing, due to recession in Europe, decreasing demand from China and growing US shale oil production. Some estimates predict $80 per barrel Brent Crude by the end of the year. Mr. Putin needs to find a way to counter the downward trend.
In this complex web of opposing EU-Russian interests, the EU has every reason but limited options to end the war in Syria; any solution will have to address Russia’s budget concerns. One of the very few possibilities which could be acceptable to both sides is to push for even tougher UN sanctions against oil-rich Iran. It would be the fifth round of sanctions Russia would have agreed to since 2006.
By Marco Funkeuropainmundo