Post-Soviet Russia's economic kingmaker is natural gas, and new President-elect Dmitri Medvedev is also the country's energy czar, helping steer soaring stock prices.
In this article, we'll take a look at Russia's gas monopoly, Gazprom--in the context of the country's new leadership.
Russia has the world's largest natural gas reserves and is also the largest international exporter of the fuel. Since the Soviet Union officially dissolved in December 1991, natural gas prices have more than quadrupled. That leaves us with a political situation where gas supplies are very sensitive, and the correlation between Russia's politics and resource stocks is stronger than ever.
Russia's President-elect is Russia's Natural Gas Czar
42 year-old Dmitri Medvedev is a lawyer by training and has worked his way up through the St. Petersburg city government (where he met his mentor, current president Vladimir Putin). But his most important position to date is his ongoing chairmanship of Gazprom, the Russian natural gas export monopoly.
In elections this past weekend, Putin's endorsement led 42 year-old Medvedev to win over 70% of the vote.
Also over the weekend, Gazprom cut natural gas supplies to Ukraine by a quarter over a pricing dispute. This is not the first time for Ukraine, or fellow former Soviet republic Belarus, to suffer a gas supply drop as leaders debate the end of Russian energy patronage with Moscow. A similar row in 2006 led to major European Union debates over energy security and a commitment to kickstart renewable and safe nuclear energy
Take a look at this BBC map of Europe's main gas pipelines and you'll see why EU officials are biting their nails again over this latest episode in the continental energy saga:
Europe is up in arms, because cuts to Ukraine and Belarus harm supplies to western Europe.
As he leads, Medvedev's Gazprom background will craft his policy decisions on both national and international energy affairs.
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