Columbia International Affairs Online: Working Papers

CIAO DATE: 03/2011

Russia's Oil Exports: Economic Rationale Versus Strategic Gains

Adnan Vatansever

December 2010

Carnegie Endowment for International Peace


Russia, the world’s largest oil producer, is vigorously promoting the development of new outlets for oil exports. While the recent launch of a long-awaited cross-border oil pipeline between Russia and China has received most of the publicity, it is a part of a much larger Russian initiative aimed at developing new oil export infrastructure in almost every possible direction: Asia, the Baltic Sea region, the Black Sea region, and the Arctic. This export strategy will have considerable policy and economic implications for Eastern and Central Europe and even the United States. There are questions, however, about Russia’s need for all these projects. Bottlenecks in reaching foreign markets did justify building new export infrastructure during the past decade, but they are no longer an issue. Furthermore, the growth in Russia’s oil output has slowed down considerably in the past five years, and it is widely assumed that the prospects for substantial growth in the future are weak.