There was never any doubt that Vladimir Putin, the Russian President, would raise his international profile in 2006. His schedule for the year included an official visit to China in March, chairing the G-8 summit in his hometown of St. Petersburg in July, and an invitation to be the guest of honor at a meeting of European Union leaders in Finland in October. Yet the way he dominated headlines around the world for much of the year — for better and for worse — may have come as a surprise even to the canny former kgb man, who has been in office since 2000.

Russia's vast reserves of oil and gas stand it in good stead at a time of high oil prices and growing international concern about future energy supplies. In 2006, Putin made use of them to bolster Russia's position in the world to the strongest it has been since the cold war ended more than 15 years ago. "He's using the advantage of high oil prices to make Russia count," says Margot Light, a Russia expert at the London School of Economics.

But Putin's use of those energy resources, combined with his continuing crackdown on free speech and civil society in Russia itself, have provoked some dismay and led many observers at home and abroad to wonder in what direction he is taking his country. In January, the Kremlin briefly cut off gas supplies to neighboring Ukraine, ostensibly because of a dispute over prices. Ukraine saw the move as an attack on its pro-Western leader, President Viktor Yushchenko. That sent a chill through Europe and brought a public rebuke from U.S. Vice President Dick Cheney. In December, Russia threatened to cut gas to two other former Soviet republics, Georgia and Belarus, unless they paid higher prices; and the Anglo-Dutch oil firm Shell bowed to pressure to let state-owned Gazprom gain control of a $20 billion natural-gas project in Sakhalin Island, shocking foreign investors.

As Russia's economy continues to grow at an annual rate of around 7%, it has become more embedded into global arrangements. In November, Russia won critical U.S. support for its bid to join the World Trade Organisation, and Putin has tried to make Russia an indispensable partner for dealing with Iran and other pressing geopolitical issues. But Russia's behavior is not yet predictable. In late September, Putin started a nasty spat over trade with neighboring Georgia, deporting hundreds of Georgians from Moscow and other Russian cities. And he pushed through new domestic legislation that restricts nongovernmental organizations operating in Russia.

Putin's second and final term as president runs out in 2008. With Russia's oil-fueled economy booming — Putin has paid back much of the nation's foreign debt — he remains highly popular at home. But his legacy will remain controversial. Says Stephen White, professor of international relations at Glasgow University, Scotland: "As soon as the price of oil weakens, Russia's real problems — like corruption, low life expectancy and the economy's dependency on raw materials — will just get worse." Putin himself complains that his foreign critics remain mired in an outdated cold-war mindset, and exhorts Russians to work harder to create a modern, prosperous society. One big campaign he launched this year aims to encourage Russians to have more children, in order to reverse a sharp drop in the population that could have serious long-term consequences. It's all part of his message that Russia needs to become strong again — a message with which the West must still learn to live.

• PETER GUMBEL
• Oil has troubled the waters for Russia's President