President Trump’s interest in rare earths and President Putin’s interest in developing the Arctic economy and shipping outline a possible framework for the two countries to coexist on the planet.
The US-Russian delegations in Riyadh identified “specific areas of cooperation,” including “joint projects in the Arctic,” which is believed to hold 13% of the world’s unproven oil and 30% of its untapped natural gas reserves. In addition, the US and Russia are interested in accelerating the exploration and extraction of critical raw materials such as copper, cobalt, and rare earths in the Arctic.
It doesn’t take much thought to recognize on a map centered on the North Pole how metals are concentrated on the peripheral coasts of the continents. Particular concentrations are present in Finland, Sweden and Canada. In the same vein, Exxon and Chevron have set up hedge funds to develop fast-track natural gas extraction activities, including in the Arctic Circle, in order to meet the projected needs for Artificial Intelligence and Data Centers.
The natural gas plants will be designed to incorporate carbon capture and storage. Chevron’s move into power generation comes months after Exxon announced plans to build natural gas-fired power plants to power artificial intelligence data centers. It is estimated that several 4-gigawatt power plants will be needed by 2027 at a cost of at least $8billion.
In the European environment, events have a different flavor. Despite the frenetic speed and variety of the February negotiations, Russia and especially Ukraine attacked oil facilities on both sides in January and February. The attack by Ukrainian air force on February 17 on a pipeline compressor station in Novorosyiisk on the Black Sea coast will reduce the flow of oil through the pipeline for two months.
It is particularly annoying for the Russian, American, British, Italian and of course Kazakh shareholders of the CPC (Caspian Petroleum Consortium) pipeline, especially since the Tengiz field has shown a decline in production since 2022. In 2021, this pipeline exported up to 1.3 million barrels of good quality oil per day, which represented 80% of Kazakhstan’s total oil production of 1.6 million barrels (1.4% of global production).
It is understandable that despite the new package of sanctions against Russia imposed on January 10, 2025, the US Treasury Department granted exemptions for oilfield services related to the CPC. In mid-January 2025, the drone attack on Turkstream was the third attempt by Ukraine. This Russian pipeline supplies Turkey with 14 Bcm and Central Europe and Greece with 17.5 Bcm of natural gas also via the Black Sea.
The risk of widespread sabotage of the Black Sea’s undersea cables and pipelines remains and extends to the Aegean Sea and the Southeastern Mediterranean. Hydrocarbon production, as well as the current laying of electrical interconnection cables between Greece and Cyprus, fall within this context.
This general set of risks includes the recent sabotage of various telecommunications cables in the shallow Baltic Sea, as well as the sabotage of the two Nord Stream 1 pipelines and one of the two Nord Stream 2 pipelines that were destroyed in 2022. Interestingly, an American Republican businessman submitted a proposal to the American administration to review the possibility of restoring Nord Stream 2, with Denmark showing particular interest.
The difficulty for the US to flood Europe with LNG before 2027, as well as recent developments in negotiations between the US and Russia, portend a continued and perhaps increasing arrival of Russian LNG, as well as a partial reopening of some Russian pipelines for tactical reasons until 2027.
The EU is in a difficult phase and its stability is necessary not only for Europe but also for the US. The situation is a bit like Israel’s support for natural gas to Egypt and Jordan to maintain stability in the region. The other version is to use part of Nord Stream 2 for the needs of creating a hub in the Baltic.
Achieving peace in the wider European area seems to be based on a dual export model of the US, peace and arms industry. The EU will be forced to buy more weapons systems from the US to correct its participation in NATO and therefore the production of weapons will be sold for the defense reorganization of NATO members instead of going to Ukraine and Gaza. In terms of US exports, it is more profitable and also helps to achieve peace in the European area and the SE Mediterranean with China in the background.
