Trust and European-Russian Energy Relations

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• Marc Ozawa (EPRG)
• Monday 29 April 2013, 12:00-13:30
• KH107, Keynes House, Judge Business School.

If you have a question about this talk, please contact Andrew Pruitt.

Much academic attention has recently focused on the causes of conflict plaguing energy trade between European and Russian partners. The question usually posed is whether Russia aims to use its oil and gas resources as a tool to exert political influence or maximise profits. Does politics precede economics or vice versa? There is, however, a critical determinant missing from the discussion, one that along with political and economic factors influences outcomes, trust. Drawing on selected cases of oil and gas partnerships, this paper examines the role of trust and its impact on energy trade. The findings are the following. First, trust mitigated suspicion and encouraged cooperation between commercial and political actors. Second, when trust was present conflicts of interest were more easily overcome while in its absence a spiral of litigation and attempts at political coercion ensued. Third, the development of trust was partially determined by pre-existing political and economic conditions. At the same time actors could make decisions that either contributed to building trust or suspicion, the opposite of trust. Some pre-existing factors, such as culture and historical memories, had a more lasting effect in trust formation than actions taken by executives and policy makers. And finally, trust was easier to build in the early stages of interactions. Once actors formed opinions of their counterparts, it became progressively difficult to change them.

This talk is part of the EPRG Energy and Environment (E&E) Series Easter 2013 series.

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