We argue that energy relations between the EU
and Russia and between China and Russia influence each other. We analyse their interactions in terms
of four areas: oil and gas trading, electricity exchanges, energy technology exports and energy
investments.
We discuss five key hypotheses that describe the likely developments in these
four areas in the next decade and their potential impact on Europe:
1. There is no direct
competition between the EU and China for Russian oil and gas
2. China and the EU both have
an interest in curbing excessive Russian energy rents
3. The EU, Russia and China compete
on the global energy technology market, but specialise in different technologies
4.
Intercontinental electricity exchange is unlikely
5. Russia seems more worried about
Chinese energy investments with strategic/political goals, than about EU investments
We
find no evidence of a negative spillover for the EU from the developing Russia-China energy
relationship. But, eventually, if these risks – and in particular the risk of structural financial
disintermediation – do materialise, central banks would have various instruments to counter
them.
