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The Russian Oil Sector and the Global Oil Economy: A Prospectus
- SAIS Review
- Johns Hopkins University Press
- Volume 23, Number 2, Summer-Fall 2003
- pp. 1-22
- 10.1353/sais.2003.0052
- Article
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Since the terrorist attacks of September 11, 2001, interest in the Russian oil sector has increased, particularly within the Bush administration. Russia is viewed as a potential buffer, if not substitute, for America's dependence on Middle Eastern oil. This paper presents an overview of the Russian oil sector and suggests that this optimistic vision is unlikely to be born out in reality. Incomplete attempts at legal and political reform continue to deter foreign investors, and the profits that drove Russian oil companies production gains in the late 1990s have all but evaporated. Russia also suffers from export infrastructure problems that could hamper its ability to play a meaningful role in the global market. This does not mean Russia cannot play any role in the evolving global oil market. Rather, Russia should consider its development strategy carefully, and U.S. policymakers should accept that the Middle East will continue to dominate the global energy supply.