With hardening positions on Eurasian energy and security issues, Russia is beginning to look more economically vulnerable on the heels of its own financial downturn. If its geopolitical influence in Eurasia is indeed slipping, the new year could look a little brighter for U.S. and European energy markets, as well as a guy we like to call “The Big J-III.”
Russia to Ukraine: no soup for you.
Andrew Kramer reports today in the NY Times that Russia is halting crude deliveries to Ukraine, just like it did back in 2006. Then Gazprom, Russia’s state-owned crude cumpnee, pulled the same lever to stiffen Russian energy bargaining in the former eastern block. Both times, the end result created a major squeeze on European energy markets, and a stronger command over spiking prices. (Here’s an update on the impact of the squeeze from the Guardian.)
To us, it signals the same thing as McCain’s picking Sarah Palin as a running mate: desperation.
Things aren’t looking so good for Russia’s Eurasian energy dominance. As Sergei Blagov reported a couple days ago in Eurasianet, a great regular synthesis of Eurasian geopolitical on-goings, Russia’s regional influence is waning with its economic downturn… much to the likes of the U.S. With Russia’s consolidation of domestic power, and its hard-lining positions on issues impacting U.S. security interests in the Eurasian heartland and the Middle East–especially on Missile defense systems–all signs point to struggle.
Russia's oil pipeline network is a key global energy market force. The perverbial lever extends throughout Europe. (Photo Courtesy: Marketoracle.co.uk)
The result in the Caspian Basin, could be a dampened Russian presence. As we’ve updated on before, the Caspian Basin is an epicenter of international jockeying in the Eurasian Heartland, bringing competition between Russian, Iranian, and U.S. energy interests.
Speaking of the Caspian, keep an eye on J-III–who’s concerned with all things energy related, especially things that travel through pipelines in Central Asia. Naomi Klein (Much respect) did a great piece on the J-III factor in 2004 for The Nation–still very relevant today.
Word in the Mountains is that J-III rolls pretty thick with it in Baku.
As he would probably tell you himself, a loosening of Russia’s grip in the Caspian could mean more blood flow… I mean, oil flow… to European markets, and a little more stability than they’ve expected in the past. At least we hope…
Jimmy does too.
[J-III smiles with a slow, knowing nod as author types.]
The Big J-III (Left) with Warren Christopher. Discussing things like flowers, feng-shui, and modern art, we're certain.
Tags: Andrew Kramer, Caspian Basin, Energy Markets, Eurasian Energy Competition, Eurasianet, Europe, European Oil pipelines, Gazprom, James Baker III, Naomi Klein, Russia, Sergei Blagov, The Nation, Ukrain, Warren Christopher
March 3, 2009 at 9:23 pm
[...] off one another through hydro-electric energy competition. (We’ve posted here, here, and here, about Russia’s attempts to subvert American influence in its perceived [...]
April 27, 2009 at 8:29 pm
[...] Further signalling Moscow’s desperation over the situation, Gazprom was pursuing a new agenda in Brussels last week to circumvent its Ukrainian pipeline route by constructing a new one linking directly to Bulgaria–a move responding to Ukraines recent bucking of Moscow pipeline dominance following fierce price spikes and a pulled-lever on supplies that sent European markets into shock earlier this year (a topic we posted on here). [...]