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

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 EU-level. It explains why member states have delegated this role, despite a general hesitancy to cooperate 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 politicised position of the EU) that help respond to it. Overall, the paper examines an important area of increasing EU foreign energy cooperation 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.