Tough times, shifting roles: examining the EU’s commercial diplomacy in foreign energy markets

Abstract:

Focusing on the strategically important Caspian region, this article demonstrates how commercial energy diplomacy – political support for foreign-investing businesses – is increasingly conducted at the European Union (EU) level. It explains why member states have delegated this role, despite a general hesitancy to co-operate in foreign energy policy and perceptions of a strong division between diplomacy-based and (EU-favoured) governance-based approaches to external energy policy.

To explain this new role (and its limits), this article employs a functional–rationalist framework focusing on the structural demands of a more challenging international energy environment and EU-level supply factors (economies of scale, increased leverage and more neutral/less politicized position of the EU) that help respond to it. Overall, the article examines an important area of increasing EU foreign energy co-operation and demonstrates how energy governance and diplomacy are not necessarily competing approaches, but rather different tools for achieving a more secure investment climate for European companies.