Publication

Ukraine's strategic location between the main energy producers in Russia and the Caspian Sea region and the consumers in the Eurasian region, its large transit network, and its available underground gas storage capacities make it a potentially crucial player in European energy transit. The country's importance is additionally likely to grow as Western European demands for Russian and Caspian gas and oil continue to increase. Yet, because of Ukraine's domestic political inefficiency and its complicated relationship with Russia, it has been unable to fully capitalize on this potential. Ukraine's current energy situation and its handling also have important negative implications for US strategy in the region. They complicate US efforts at helping consolidate Ukraine as a viable democratic state and regional leader. Moreover, Ukraine's lack of a clear energy policy strategy complicates the US strategy of supporting multiple pipeline routes on the East-West axis as a way of helping promote a more pluralistic system in the region as an alternative to continued Russian hegemony.