Scrapping the South Stream: A Win for Obama and Merkel?

This week President Vladimir Putin announced that Russia would no longer be building its South Stream natural gas pipeline. The scrapping of the pipeline was hailed as a victory for the EU and America, who have been at odds with Russia over its annexation of Crimea and the Ukrainian civil war since March. The South Stream was planned to bypass Ukraine, instead travelling through Bulgaria, Serbia, Hungary and Austria. Following Putin’s cancellation, an alternative route through Turkey is in the process of being devised. The BBC have framed this announcement as positive news for those who are now missing out:

Russia’s critics have long argued that, parallel to nuclear expansion, gas pipelines constitute “the long fingers of the Kremlin”, opening the way for political as well as economic influence. So this decision is a dramatic change of direction.

“It may be a bluff,” said Martin Vladimirov, an energy specialist at the Centre for the Study of Democracy in Sofia, “to pressurise the Bulgarian, Serbian, Hungarian and Austrian governments to unite behind accelerating the project, and make a better case for it to the European Commission”.

However, he favours a second explanation, that South Stream is “simply too big a burden” amid the difficult financial situation facing Russia’s state-owned giant Gazprom.

However, the article then goes on to state that the loss has come as a setback to these nations, particularly Hungary and Serbia, both of whom are among Russia’s strongest allies in Europe.

Hungarian Foreign Minister Peter Szijjarto said that his country would have to find alternative gas supplies, as a result of the Russian decision.

But in Ukraine the response to President Putin’s announcement was one of relief.

“The cancellation of South Stream was made for economic reasons, disguised behind a political explanation,” said Andrii Tiurin of Ukrainian nuclear company Energoatom.

“Why spend so much money creating alternative routes to supply the same gas? At a time of low and falling oil prices, why spend so much on a project which is unnecessary for Europe?”

The project may have been deemed unnecessary by Ukraine and others in Washington’s sphere of influence, but this was certainly not the case with Bulgaria, who was set to benefit from the jobs it would create. Putin has since proposed that Bulgaria request compensation for loss of profit from the European Commission. He also made clear that Russia would refocus its gaze to the East:

The pipeline, along with the North Stream pipeline that carries gas to Germany through the Baltic Sea, was meant to bypass Ukraine. Mikhail Krutikhin, a Russian energy analyst, said: “From the beginning this was a political project, and the goal was to punish Ukraine and cut it off from gas flows. It was never economical to spend so much on this pipeline.”

However, Moscow will boost gas supplies to Turkey and Putin said that instead of South Stream, a new hub could be built on the Turkish-Greek border to supply Europe with gas. He also issued a thinly veiled threat to Europe, hinting that since concluding a massive, long-term gas deal with China earlier this year, the European market was no longer that important for Russia, after a year during which the Kremlin has been targeted by western capitals for its role in Ukraine.

“We will re-concentrate our energy resources on other regions of the world,” said Putin. “We will work with other markets and Europe will not receive this gas, at least not from Russia.

“We think this is against Europe’s economic interests and is causing damage to our cooperation.”

The Guardian claims this maneuver is a “threat”; in reality it is a truthful assessment of the current relations between Russia and Europe. Today the US Congress passed a resolution condemning Russia. In addition to calling for an assessment of the “readiness of US and NATO armed forces”, the resolution:

Calls on Ukraine, the European Union (EU), and other European countries to support energy diversification initiatives to reduce the Russian Federation’s ability to use energy supplies as a means of applying political and economic pressure on other countries.


With this in mind, Russia’s cancellation of the South Stream is in fact one step ahead of Washington’s aims.

Now we get to the interesting part.

As already mentioned, the gas pipeline will now be diverted through Turkey; this was confirmed during a trip by Putin to meet Erdogan in Ankara on Monday. The two leaders also announced that Russia will build Turkey’s first nuclear power plant, as well as a new goal to increase their two-way volume of trade from £21bn to £64bn by 2020. This strengthening of economic ties follow a string of announcements regarding cooperation between Russia and Asia, such as two large gas deals with China,  plans to build several nuclear power stations for Iran, and the future reconstruction of post-war Syria.

It is here that Washington’s plan to isolate Russia falls apart. Mike Whitney states:

The wars in Ukraine and Syria are not really separate conflicts at all. They’re both part of the same global resource war the US has been prosecuting for the last decade and a half. The US plans to cut off the flow of Russian gas and replace it with gas from Qatar which will flow through Syria and onto the EU market after Assad is toppled.

Here’s what’s going on: Syria’s troubles began shortly after it announced that it was going to be part of an “Islamic pipeline” that would transfer natural gas from the South Pars gas field off the coast of Iran across Iraq and Syria, eventually connecting to Greece and the lucrative EU market. According to author Dmitri Minin:

“A gas pipeline from Iran would be highly profitable for Syria. Europe would gain from it as well, but clearly someone in the West didn’t like it. The West’s gas-supplying allies in the Persian Gulf weren’t happy with it either, nor was would-be no. 1 gas transporter Turkey, as it would then be out of the game.” (The Geopolitics of Gas and the Syrian Crisis: Syrian “Opposition” Armed to Thwart Construction of Iran-Iraq-Syria Gas Pipeline, Dmitri Minin, Global Research)

Two months after Assad signed the deal with Iraq and Iran, the rebellion broke out in Syria. That’s quite a coincidence, don’t you think? Funny how frequently those kinds of things happen when foreign leaders don’t march to Washington’s tune.

With Russia’s announcement to reroute its gas through Turkey, the US has been undermined on two fronts: both on Ukraine/Europe and on Syria. Already hampering Obama’s attempts to topple President Assad, the Turkey deal may provide Putin with some additional leverage. It currently seems that the State Department has no strategy when it comes to either conflicts, but is merely bumbling along, reacting to problems as they emerge. Even if Erdogan continues to insist that ‘Assad must go’, Putin’s visit has certainly schooled Obama in terms of diplomacy – highlighting that heads of state can overcome disagreements and find compromises in other areas. This stands in stark contrast to Obama’s disinterested manner – unwilling to so much as talk to those he can’t see eye to eye with.

What is clear is that rather than isolating Russia, the West’s current posturing has actually strengthened its relations with the East – particularly China. As is already evident, if Europe continues to put Washington’s interests before its own, this will only inflict damage on itself in the long-run.

Was Russia’s South Stream too big a ‘burden’ to bear?

Putin blames EU as Russia abandons plans for South Stream gas pipeline

H.Res.758 – Strongly condemning the actions of the Russian Federation, under President Vladimir Putin, which has carried out a policy of aggression against neighboring countries aimed at political and economic domination.

Defending Dollar Imperialism


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