europe... plus the Chins just sided with Russia on Georgia
Posted on 08/28/2008 4:33:08 PM PDT by Fred
Fears are mounting that Russia may restrict oil deliveries to Western Europe over coming days, in response to the threat of EU sanctions and Nato naval actions in the Black Sea.
Any such move would be a dramatic escalation of the Georgia crisis and play havoc with the oil markets.
Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for a supply cut to Germany and Poland through the Druzhba (Friendship) pipeline. It is believed that executives from lead-producer LUKoil have been put on weekend alert.
"They have been told to be ready to cut off supplies as soon as Monday," claimed a high-level business source, speaking to The Daily Telegraph. Any move would be timed to coincide with an emergency EU summit in Brussels, where possible sanctions against Russia are on the agenda.
Any evidence that the Kremlin is planning to use the oil weapon to intimidate the West could inflame global energy markets. US crude prices jumped to $119 a barrel yesterday on reports of hurricane warnings in the Gulf of Mexico, before falling back slightly.
Global supplies remain tight despite the economic downturn engulfing North America, Europe and Japan. A supply cut at this delicate juncture could drive crude prices much higher, possibly to record levels of $150 or even $200 a barrel.
With US and European credit spreads already trading at levels of extreme stress, a fresh oil spike would rock financial markets. The Kremlin is undoubtedly aware that it exercises extraordinary leverage, if it strikes right now.
Such action would be seen as economic warfare but Russia has been infuriated by Nato meddling in its "backyard" and threats of punitive measures by the EU. Foreign minister Sergei Lavrov yesterday accused EU diplomats of a "sick
(Excerpt) Read more at telegraph.co.uk ...
Russia's threat to cut off oil and gas supplies to Europe like they did to Estonia in 2007 due to a “repair operation” makes Putin sound a lot like Stalin in the 1948-1949 Berlin Blockade. Road and rail access to Berlin was also then cut off due to “repairs”. The apple doesn't fall far from the tree.
The blockade was a failure and backfired by hastening the establishment of NATO and an independent West Germany.
i read in the newspapers today that even china is beginning to get concerned about the russian recognition of abkhazia and so ossetia.
china has some fluid real estate too!
europe... plus the Chins just sided with Russia on Georgia
Not surprised, although there have been some conservative motions (cause: Muslim immigrants), most Western European nations are willing to fight only if the US supplies the soldiers and they can supply the rapists.
Foolishly, we let PC leftist agenda prevent us from preparing, and now we are unprepared and mostly alone.
It is sad that a nation that joined us to the extent that they were able in our effort of self defense is the target that we were unprepared to assist.
roger that...
The SCO was not too happy with Russia giving independence to the two republics, but warned that any EU/US Sanctions would be counterproductive.
I can guarantee that the Russians will back off of recognizing S. Odessa and Abhkanza’s independence. However, this will cause Russia to take the entirety of Georgia and say it was in itself a breakaway republic (Similar to China having claims on Taiwan). That is what the SCO wanted.
Do we still sell these dopes wheat?
We need a foreign policy review pronto.
Actually, they are *still* ticked at the Germans: Berlin was right beside Washington in the rush to recognize Kosovo, and German backing of the Croats contributed to the original disolution of Yugoslavia.
Hmm. The whole article is a worthy read. Sounds like this measure is in retaliation to foreign investments leaving Russia. Like, um, Russia is holding Europe hostage until/unless foreign investments resume in Russia. Russia's capital markets are entering the freak-out zone.
And, it sounds like Russia government is attempting to dictate to private companies. Not good.
But Russia has big trouble. The have short term leverage (oil and cash) but a long term problem. They're dying. The men have a high degree of alcoholism and the women are voting with their bodies and not having children. They are half the size of the U.S. in population and shedding half a million people a year. The demographic situation is so bad that in a generation they will have only a few million women of child bearing age. Also, in 40 years or so their population will be 1/2 Muslim.
Can they use their oil and cash now to solve their long term problem by gobbling new territory? I don't know. I tend to doubt it. Mergers are tough and those by force more so. Forced socialization of disparate populations takes hundreds of years if it works at all. The last time they tried it came unraveled in only 70 years. It will be much tougher this time around. This time they don't have time on their side.
For Russia to do well long term, her leader must restore Russian national pride WITHOUT making her a pariah, massively broaden the base of her economy while making it lightly regulated free enterprise, provide honest courts and public servants, and the rule of law. Communism, or theft in any disguise, must go. A whopping job.
Heard on the Street that when the Palin announcement was made the crude oil futures started to head down. The Palin pick is very bearish for oil, Wall Street is expecting drilling in ANWR...
How do you "stop" them? That's the $64 question.
We need to get our own house in order for sure.
p.s. What is happening with the proposed pipeline connection with the BTC down through Israel?
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