Tag Archives: Russia

Strait Talking: A Canadian Perspective on Hormuz

By Michael Bonner

What’s it really worth?

Late last year, Iran began threatening to close the strait of Hormuz in the Persian Gulf. At their narrowest point between Iran and Oman, the Strait are only 21 miles wide, but they have a perceived significance out of all proportion to their size, as some 17 million barrels of oil pass through them every day.

This story was recently brought home in a long article in the Financial Times on 5 October by author, Javier Blas. His source was a report by the US Energy Information Administration published 22 August 2012 entitled World Oil Transit Chokepoints

Here is the gist of Blas’ argument. International sanctions have taken a grim toll on Iran. The Iranian economy is in horrendous shape, and the oil has lost 60% of its value since the beginning of the year. Merchants have gone on strike as a result. President Ahmadi-Nezhad is in his final term in office and he and his supporters have been increasingly sidelined by more conservative elements within the Iranian regime. Could it be, as Blas suggests, that Iran has less to lose now than ever before and that closing the strait — even if only a diversionary tactic by the president — is now more likely than ever?

It should be remembered that the 17 million barrels passing through the strait of Hormuz daily constitute only 35% of the world’s oil. Apart from Iran itself exporters of oil primarily threatened by closure of the strait would be the Gulf states of Kuwait, Bahrain, Qatar. All their oil goes through the strait. Iraq, the United Arab Emirates, and Saudi Arabia, would also be affected, but not all their oil moves through the strait (the respective figures being 87%, 55%, and 48% of exported oil). So these countries, in so far as they are exporters of oil, would suffer greatly if the strait were closed.

But Gulf states such as Abu Dhabi and Saudi Arabia have built pipelines which, when fully operational, will vastly reduce their reliance on the strait. It must be said, however, that the pipelines will only be ready in about 18 months, which may be too late. This strategy, though, is sound in principle, and other gulf states should find similar means to avoid relying on a single route of export.

What about the West? Though the effect of closing the strait would not be negligible, it would not be catastrophic either — at least as far as oil supply is concerned. Only 16% of America’s imported oil passes through the strait, followed by Germany’s total of 5% — numbers which are dwarfed by statistics for Japan, South Korea, India, and China whose respective figures are 82%, 74%, 63%, and 43%. So it would seem that western countries have much less to fear from a closure of the strait than does Asia, at least as far as oil supply is concerned.

None of this is to say that closure of the strait would not have a profoundly negative economic effect, which it certainly would. But the effect would not be permanent. And in every crisis lies opportunity. In the event that the strait were indeed closed, thereby denying enormous amounts of oil to Japan, South Korea, India and China, two countries may stand to gain from supplying them.

The first is Russia. Russia produces 10.41 million barrels of oil a day, just slightly higher than Saudi Arabia’s output. According to the CIA, Russian reserves must be about 60 billion barrels, and there is much more to be discovered, so we can expect output to go up. But this would surely be augmented by the supposed 100 or so billion barrels of oil in Central Asia, historically within the Russian sphere of influence, and which Russia would almost certainly monopolize. In theory Russia and Central Asia could well end America’s partial reliance on gulf oil and supply large amounts to Japan, South Korea, India, and China at the same time.

But the strategic concerns here would be enormous. Thanks to Presidents Putin and George W. Bush, Moscow now has renewed ties with Kabul, where it exercised influence throughout the 20th century. Could Russia pass up the opportunity to restart its drive towards the Indian Ocean in search of an ice-free port? Much of the necessary infrastructure is already in place, and if Russia developed oil reserves in the former Soviet Central Asian republics (as well as its own), transport to China and India via the Wakhan corridor in Afghanistan and rail links from Uzbekistan via Mazar-i Sharif through Afghanistan and Pakistan would be essential. Construction of such links has been in planning for some time. But a port on the Indian Ocean, perhaps with Pakistan’s coerced permission, would be ideal for transport of Russian oil to India and beyond. Thus American naval superiority in the Indian Ocean (based on the tiny British atoll of Diego Garcia) would be entirely outflanked, and the Fifth Fleet, stationed on Bahrain, could not offset this. The result might be naval race of terrifying scale.

If closing the strait of Hormuz could lead to Russian dominance of the Asian oil market, many will argue that it would be best to keep them open at almost any cost. Many may therefore be pleased to know that the second country standing to profit from closure of the strait is Canada. Alberta’s Oil Sands are expected to yield about 4 million barrels a day by 2015, a puny amount that is easily outstripped by Russia’s colossal daily output. But Canada’s reserves are greater than those of Russia and Central Asia combined. In 2008, the government of Alberta estimated that 1.75 trillion barrels of oil could be extracted from the Oil Sands. Admittedly, however, only about 10% of this can be extracted in an economically viable manner at present. But 1.75 billion barrels is still a formidable amount and might well match or surpass Russian and Central Asian reserves. Output could also be increased with more investment that would further benefit Canada by creating jobs.

Canadians might look forward to a day when domestic oil reserves foster a massive national industry with international reach, both to America to the south and across the Pacific — and this without the alarming geostrategic concerns attending the rise of Russia. It is also worth noting that exporting oil from Canada across the Pacific would obviate another oil transit chokepoint: the strait of Malacca connecting the Indian and Pacific oceans. Canada’s dominance as an energy superpower, as some have said, would require an enormous amount of investment in infrastructure and political will to see it through, but it might well be worth it.

The high potential of the Oil Sands is not in doubt, but transport of oil through pipelines (notably the proposed expansion of the Keystone XL and the Gulf Coast Project) remains highly controversial both in Canada and the United States. And the environmental questions hanging over the Oil Sands themselves cannot be ignored either. So it may be some time before Canada can compete seriously with other oil-exporting countries — if ever. In the meantime, it will be best for everyone that the strait of Hormuz remain open. But Canadians may well wish to consider that Canada’s role as an ‘energy superpower’ may be infinitely preferable than other alternatives.

Michael Bonner studied Iranian history at Brasenose College in the University of Oxford. He is widely published on pre-Islamic Iran in both English and French, and his master’s thesis was published a year ago by Studia Iranica in Paris. Michael is a member of the Balkh Art and Cultural Heritage project, an archeological team based in Oxford devoted to the study of the ancient city of Balkh near modern-day Mazar-i Sharif in northern Afghanistan. Any views or opinions expressed in this article are solely those of the authors and the news agencies and do not necessarily represent those of the Atlantic Council of Canada. This article is published for information purposes only.

Putin Announces New, Innovative Naval Policy: Build Massive Navy

International Maritime Satire Week Warning: The following is a piece of fiction intended to elicit insight through the use of satire and written by those who do not make a living being funny – so it’s not serious and very well might not be funny.

In what is being hailed as a new direction for Russian defense, President Vladimir Putin announced today that Russia is launching a massive naval construction program with the goal of developing an absolutely huge navy.  At 518 vessels in service, Putin declared the Russian Federation Navy far too small to meet Russian security needs.

Speaking at a press conference held at Admiralty Shipyard in St Petersburg, the Russian president said the proposed funding binge on the navy was an entirely novel idea and neccesary to protect the nation’s shores and foreign interests from its many enemies.

“Russia is a maritime state,” said Putin, dripping with seawater after single-handidly recovering the remains of an 18th-century shipwreck on a dive.  “It is puzzling that never before has Russia developed a large navy like we are planning.  We will add over one thousand ships to our fleet to protect our shores against foreign threats and secure our trade and ocean resources.”

“This is an unprecedented buildup of naval forces for the Russian state,” he continued, towelling off before mounting a brilliant white stallion, bare-chested.  “But it is appropriate.”

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Two dozen heavily upgraded Krivak-class frigates, to be christened the Admiral Grigorovich-class, are on order as part of the build-up, and “a sight never before seen on the seas,” said Admiral Viktor Chirkov.

Documents released ahead of the press conference shed greater light on the details of Russia’s shipbuilding program.  The plan calls for an additional 1,114 ships to be built over the next 15 years, with hundreds of new attack submarines and surface ships.  Russia’s sea-based nuclear deterrent will also be recapitalized.  Once completed, the ships will be spread equally among the four existing fleets of the Russian Federation Navy – Baltic, Black Sea, Pacific, and Northern.

Russian government officials were quick to offer their support for the program.

“This is definately a sustainable level of naval power that our growing economy and population can support,” said Admiral Viktor Chirkov, commander-in-chief of the soon-to-be enlarged Russian Federation Navy.  “We were just sitting around befuddled, trying to figure out how we could defend our fisheries, oil, and overseas trade with only 500 ships, when the President came up with this plan to build a lot more ships.  It’s brilliant!  And it is only natural that we have a navy capable of defending these assets.  Anything less than 1,000 ships is preposterous – I can’t believe we haven’t been invaded already!”

Russian Prime Minister Dmitry Medvedev offered another justification for the new policy.

“America, a continental state, is bordered by only two oceans and one gulf.  Russia faces two oceans and three seas.  If a continental state like the United States can have a huge navy, why cannot a maritime state like Russia?”

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Prime Minister Dmitry Medvedev inspects the bridge wing of a Russian naval vessel during a fact-finding mission for the first Russian naval construction program ever.

In Washington, D.C., U.S. officials were skeptical of the Russian government’s new plans.

“There is no conceivable need for Russia to have such a large navy,” said U.S. Chief of Naval Operations Admiral Jonathan Greenert, questioning the economic rationale for the Russian government’s new shipbuilding plans.

“The Russians don’t engage in all that much trade, and what they do, they do with the countries they share land borders with, like EU members or Central Asian states.”

Greenert also questioned the novelty of the program.

“What are they talking about, ‘new policy,’?” he asked.  “The Soviet Union had a massive fleet when it collapsed just over twenty years ago.  The huge naval build-up that the Soviet Union conducted was one of the reasons its economy stagnated and communism collapsed.  Are these guys suffering collective amnesia?”

“I mean, I spent the first 15 years of my career in submarines chasing their ships around the world.  There were tons of them.”

Asked for comments, Chirkov found Greenert’s claims less than convincing.

“If we had built a huge navy, why is it not around today?  No one builds an enormous navy and then just lets it fall to pieces,” said Chirkov.  “Such claim is ridiculous.  Russia has never had a big navy.  This is an unprecedented new policy, and a reasonable size given the strength of Russia’s economy and its position of global influence.”

In a related announcement, Defense Minister Anatoliy Serdyukov said the Ministry of Defense was investigating the creation of a fifth, mobile fleet.  “We are calling it the Ocean-Going Fleet,” Serdyukov said.  “The idea has never been studied before, and its development would truly be an innovation.  This study demonstrates President Putin’s commitment to a strong national defense.  It is an untested idea, but we are confident the Navy could execute it exceedingly well – even if we have no historical models upon which to draw lessons.”

Ice-basing the Arctic

So the trappings of life under the thumb of your home country have finally forced you to the seas. Why not strike out to the pristine, untouched mineral-rich reaches of the Arctic? Climate change in the far north may soon open the long-sought Northwest Passage which will allow ships summer time passage from Europe to Asia a fraction of the travel time. Oil exploration is booming with all the big oil companies vying for their slice of the pie. Increased shipping capacity could mean a black gold mine for your tiny floating kingdom, if you can find a place to put it.

This map shows just how complicated the Arctic seascape really is.  Russia has already planted their flag at the North Pole sealed in a titanium capsule.  They are still working out the particulars on the definition of their continental shelf, which may validate their claim of the pole and a huge swath of the frozen north.  But don’t forget, once clear of Russian claims you still have to contend with Danish, Norwegian, Canadian, U.S. and Icelandic territory.  A sea-based nation could benefit from partnership with any of these nations for security and export potential, assuming any of them would be interested in having a little neighbor to the north. 

An Arctic sea-base would mean a harsh existence for its inhabitants. Long periods of cold and darkness would require advanced climate control. Keeping the whole thing afloat on or amid constantly shifting polar ice and occasional liquid water would require clever flotation systems.  Yet all the expense of setting up this sea-base will be worth it.  Others have made significant investment with seemingly impractical logistical hurdles but still continue to make the far north work, there is such a huge economic incentive to do so.  

Creating a sea based nation in the Arctic could provide a tiny floating country with vast mineral wealth and, if the climate models pan out, an easy way of getting it to market. And as of this writing, the Somali pirate threat to the Arctic is pretty much non-existent, good news for security. 

Behind the Bluster: The Reality of Russia’s Rhetoric for a Global Navy

By Ian Sundstrom

A slowly expanding shipbuilding program is no evidence of greater interest in the navy by the Russian government, and Russian interest in overseas bases does not mean significant changes in the international environment. If Russia does obtain more overseas bases, it will not result in a sustained global presence in the near future.

Russian aircraft carrier Admiral Kuznetsov

Throughout the ongoing Syrian crisis, Russia has stuck by the Assad regime and repeatedly stressed its desire to retain its access to the Syrian port of Tartus. Russia claims the base is needed for training and maintenance for routine counter-piracy patrols.[1] The base also gives Russia a bit claim to the position of global influence the Soviet Union once possessed.[2] Additionally, it may serve as a reminder of Russian influence in the Middle East or provide an added layer of defence for Russia’s Black Sea coast.[3] Just this week, the Russian government announced its renewed intentions to keep Tartus in conjunction with the desire to open new naval facilities in Cuba, Vietnam, and Seychelles.[4] It would appear to demonstrate a new desire by the Russians to project naval power around the world. But does this presage a global focus for the Russian Navy? The answer: not likely.

 

There are a number of reasons why the Russian Navy could not develop a global posture, even with access to new overseas facilities. The first is cost. Long-distance deployments are costly in fuel and maintenance expenditures. This is particularly problematic given instability in the Russian state budget. The budget is heavily dependent on high oil and gas prices – up to one third of government funds come from hydrocarbon revenues – meaning Russian military activity is beholden to global petroleum prices.[5] This has serious implications for Russia’s military modernisation, a key component of its current national security strategy.[6] In fact, an article in RIA Novosti stated that Economic Development Minister Andrei Belousov recently quashed rumours of a three-year delay in Russian rearmament plans.[7] The article noted that the Finance Ministry has been consistently opposed to high levels of defence expenditure because of the strain they put on state finances. Given intra-governmental disagreement over simply recapitalising and modernising the ailing military it is unlikely that funding will be available for foreign bases. After all, just in 2002 Russia closed its facility at Cam Ranh, Vietnam due to cost.[8] Expensive global cruises, sustained foreign deployments, and overseas bases are not sustainable for Russia.

 

The second reason is the Russian Navy’s aging equipment. Most of its ships are ex- Soviet vessels, many over thirty years old.[9] At this stage in their careers, these vessels require lengthy periods of maintenance to remain operational. Unfortunately for the navy, Russia lacks adequate maintenance facilities to keep them fully functional.[10] Just in 2008 the pride of the Russian fleet, the carrier Admiral Kuznetsov, suffered an electrical fire off Turkey and an oil spill off Ireland, all on the same deployment.[11] If Russia increases the pace and range of its naval deployments, similar incidents will likely occur. Furthermore, the Russian Navy suffers safety issues, demonstrated most spectacularly by the Kursk incident in 2000.[12] These would only be exacerbated by an increased deployment schedule, which would mean reduced training for short-service conscript crews and subsequent attendant issues.[13] With aging equipment, inadequate maintenance facilities and poor safety procedures, it would be difficult for Russia to maintain a global posture without seriously degrading its fleet. This brings us to the final point: the Russian Navy cannot handle increased attrition because it has already been severely reduced in size since 1990.

 

The Russian Navy is just not large enough as it stands to both maintain a global presence and meet its obligations nearer home. In 1990, the Soviet Navy stood at 2052 vessels. Today its Russian successor stands at 518, of which a maximum of 79 could be considered significant combat assets.[14] It is a shadow of its former Soviet self. On top of this reduction, Russian shipbuilding facilities are woefully inadequate. For example, from 1994 to 2008, only seven ships, all begun during the Soviet era, were completed.[15] RIA Novosti claims that 10 to 15 new ships will be launched this year, but it is likely that at least some of these will be delayed, and none are particularly large or capable ships.[16] Given its reduced size, the Russian Navy has had to focus on its core responsibilities. Russia’s core national interests include ‘ensuring the solidity of the constitutional system, territorial integrity, and sovereignty of the Russian Federation’, and the Navy helps achieve these by protecting the Russian coast and defeating terrorists and drug smugglers.[17] Russia has only a handful of major naval assets, barely enough to ensure its most basic national security objectives much less adopt a wider-ranging posture.

 

If Russia does obtain more overseas bases, and it appears Vietnam will at least allow Russian ships to visit Cam Ranh, the result will not be a sustained global presence in the near future.[18] In the longer term the Russian Navy may shift its focus, and a slowly expanding shipbuilding program does provide evidence of greater interest in the navy by the Putin government.[19] As it stands, Russian interest in overseas bases is a curiosity, but does not mean significant changes in the international environment.

 

Citations

[1] RIA Novosti,‘Russian Navy Holds on to Its Syria Base’, 25 July 2012

[2] BBC,‘How vital is Syria’s Tartus port to Russia?’, 27 June 2012

[3] I argue that Tartus provides Russia strategic depth on its Black Sea flank here. It would appear that Vice-Admiral Chirkov, head of the Russian Navy, supports this argument by referring to Tartus as in the ‘Black Sea Fleet’s strategic operational area’ in RTT News, ‘Russia to Retain Tartus Naval Base in Syria’, 26 July 2012,

[4] RIA Novosti,‘Russian Navy Holds on to Its Syria Base’, 25 July 2012; Reuters,‘Russia wants naval bases abroad-report’, 27 July 2012

[5] Andrei Shleiffer and Daniel Treisman (2011), ‘Why Moscow Says No: A Question of Russian Interests, Not Psychology’, Foreign Affairs, Vol. 90, No. 1, p. 125

[6] Russia’s National Security Strategy to 2020, paragraphs 28-32

[7] RIA Novosti,‘Russia’s Rearmament Remains on Schedule – Econ Minister’, 2 July 2012,

[8] International Business Times,‘Russian Navy Looks to Expand Bases Abroad, Goes Hunting in Southeast Asia, Indian Ocean, and Caribbean’, 27 July 2012

[9] Dmitry Gorenburg (2008), PONARS Eurasia Policy Memo No. 23: ‘Has the Russian Navy Turned a Corner? Recent Trends in Russian Shipbuilding and Naval Deployments’, pp. 22

[10] Ibid., pp. 2-4

[11] Dmitry Gorenburg (2009), PONARS Eurasia Policy Memo No. 57: ‘Russian Naval Deployments: A Return to Global Power Projection or a Temporary Blip?’, p. 3

[12] Ibid., p. 6

[13] Even a major vessel like Pyotr Veliky has conscript crewmembers. Russian conscripts serve for only one year. Ria Novosti, ‘The battle-cruiser Pyotr Veliky’, 22 April 2010. [14] IISS, The Military Balance 1990, pp. 36-38 ; IISS, The Military Balance 2012, pp. 194-196

[15] Dmitry Gorenburg (2008), PONARS Eurasia Policy Memo No. 23: ‘Has the Russian Navy Turned a Corner? Recent Trends in Russian Shipbuilding and Naval Deployments’, p. 2

[16] Bloomberg,‘Russian Navy May Add Up to 15 New Warships This Year, RIA Says’, 27 July 2012

[17] Russia’s National Security Strategy to 2020, paragraphs 21 and 41

[18] RIA Novosti, ’Vietnam Ready to Host Russian Maritime Base’, 27 July 2012

[19] IISS, The Military Balance 2012, p. 187; RIA Novosti,‘Russia to Build New Aircraft Carrier After 2020’, 26 July 2012,; RIA Novosti,‘Russian defense minister denies plans to build aircraft carriers’, 2 July 2012; Captain Thomas Fedyszyn, USN (Ret.), ‘Renaissance of the Russian Navy’, Proceedings, March 2012

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