What Cold War II will look like

When it comes to Washington, Russia’s relations with the United States will eschew any warmth that may still remain. There will be no return to the eyeball-to-eyeball Cold War confrontation, though; on the contrary, the relationship is likely to grow even more distant. Elements of U.S.-Russia cooperation might survive where the two countries’ interests clearly meet, but doing anything together in Syria or Iran would become much more difficult. Trade and investment will be restricted as a result of U.S. government sanctions, and the Russian equity market, owned largely by foreigners, will collapse. By contrast, however, EU-Russia trade, worth almost $500 billion a year, will continue by and large, due to economic interdependence between the two.

As Russia’s relations with the West deteriorate, its ties with China will need to grow stronger. With more problems in store for Gazprom in the European market, the Russian gas company may have to agree to sell gas to China. Significantly lower prices offered to Beijing would be compensated by the emergence of an alternative market. With Russia likely to be excluded from the G-8, Moscow will have to make more use of the world’s remaining global platforms, such as bilateral summits with China or forums with fellow BRICS countries or with Shanghai Cooperation Organization countries. In all these forums, however, Beijing, rather than Moscow, will be the senior power. As a result, Moscow will lose its unique position of being present in all major multilateral organizations, both Western and non-Western.