As world energy prices continue to rise and Russia's oil and gas production accelerate, Russian officials increasingly talk of their country as an "energy superpower." By reversing the economic decline of the 1990s, Russia's oil and gas have given the Kremlin the financial resources —as well as the confidence —to act as a major international power with an increasingly assertive foreign policy. This report examines Russia's energy policy from the perspective of U.S. security interests. It concludes that the international situation is potentially serious. The Kremlin could use its control over energy to pressure its immediate neighbors, who depend on oil and gas deliveries that cross into Russian territory. The European Union, heavily dependent on Russian energy, will have potentially limited flexibility in dealing with Russia, creating discord within Europe. And the construction of pipelines to East Asia, coupled with rapid demand growth in China, India, and elsewhere, will make the Kremlin a significant player in Asian security. In addition to evaluating the current U.S. approach to Russia's energy-fueled ambitions, the report offers solid policy recommendations for Washington and the new administration.