Skip to comments.Russia may cut off oil flow to the West (so much for freedom of Ossetia)
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 ...
the dim euros are starting to wake up.
Russia will help McCain win by wide margin.
What will the world’s plan of action be? If Russia can blackmail Europe with oil in order to expand their power, then we’ve already lost.
What reason is there to not stop them right now? It will only continue.
They’re not ticked at the Germans, its just Poland which the pipleline traverses. They’re still hopping mad over the ABM shield deal and mutual defense treaty. They’ve now threatened Poland about every way they possibly can.
P.S. I’m not a ‘strategerist’ and welcome any input.
Amen! The West should have seen this coming. Putin gets power through energy control. This may work better than the Russian Army.
“..the dim euros are starting to wake up.”
They may wake up to the reality of their precarious situation, but is there really anything they can and will do about it?
So we drill here, drill now, and WE sell to Poland, screw Russia!
How about we ask the new axis of evil Pelosi/Obama/Reid at the DNC convention tonight..They claim to have all the answers...
HEY RUSSIA! DICK CHENEY TO YOU!
We can pay $4 gas but we. i.e. The West, can crush you like a freaking ant if we band together and decide to.
Erm... the reality is that is very much impossible. Unless good chunk of western Europe wants to have its lights shut off. They import almost half of their natural gas and a big chunk of oil from Russia. The Russkies got them by the balls, *and*, we pissed them off royally lately. We completely told them to go pound sand over Kosovo. We have been pushing NATO forward. We have pushed ABM defense into Poland literally to their border. And, somehow, all this time, they were quiet - building up their strength and now time has come to assert to the west that things may not be quite what the west believes them to be. It’s a good wake up call to the Eurowheenies who couldn’t defend themselves now from the Islamist within their own borders, not to mention a resurgent Russia.
All the more important we get McCain elected, wrap up Iraq and start giving a bit more bandwidth to other areas of the world.
Which is why I don't understand why the US and the rest of the world didn't have a better handle on it.
yes, diplomatically, financially, and militarily.
but they have to have balls!
they call president bush “the cowboy president” because he has balls and they do not.
i read in the newspapers today that even the chinese are starting to wonder about russia’s grab of so ossetia and abkhazia.
Import oil from Norway. Rename the pipeline Puto.
well,this is a national security issue,,,when you cut off heating /electricity/transportation souces of energy for political reasons ,you are playing with fire
Yep. Putin made no big secret of his displeasure with European meddling. That was when we should have made sure he could do nothing about it.
Being unprepared is our own fault.
Our politicians failed to learn anything thirty years ago after the Arab Oil Embargo to punish those who supported Israel during the Yom Kippur War of 1973. Back then we still produced 70% of our crude oil needs. Now we produce about 30%.
Have they yet learned that we must develop our ability to produce a large percentage of our energy needs, or we will always be subject to supply manipulation by such as the Arabs or the Russians or Hugo Chavez?
Nothing new in this story. The danger of this sort of action has been known for 30+ years. It’s just playing “Russian” roulette, waiting until some oil producing thug nation decides to slip a bullet into the chamber.
McCain’s bold proposal is to drill more offshore, IF the state(s) involved agrees. But no drilling in ANWR.
Ah, yes, band together.
Let them do it. In the end Russia will lose big time.
Russia is cash rich and in the black, so they can run for a while.
Meanwhile, China will be interested in extra oil, and just loves to not do what we ask (a boycott), and some one's economy must go without oil right away, who's it going to be, Europe or the US?
If they reduce flow or shut it off, Poland should padlock the valves on their side of the line, and leave it shut off for another week or so after the Russians try to put it back into service.
What about that line from the Caspian to Europe by way of Ukraine? Time to get that thing underway, no?
I'm also shorting Obama.
Apparently there is no Russian word for “fungible”.
The Cold War is back and we had better face it!
I think I saw this in a Larry Bond book years ago.
I understand that a fair amount of foreign investment has fled Russia since the Georgia thing.
It seems foolish to play chicken with a fungible commodity.
If Russia loses it’s energy revenue, they’ll probably be out of money in short order.
Seems they need to sell it as much as Europe needs to buy it.
And if Poland isn’t going on a crash diversification program, they are dunderheads.
Oh, B.S. It will take 10 years to see the effects of this oil cutoff at the pump and it probably won’t drive prices up more than a few cents............./s
Most thinking Americans with common sense have seen all of this coming since the Arab oil embargo of the seventies. Some people have wondered why this oil strategy agianst the West hasn't happened sooner. And yes it will work better than the Russian Army. It only depends on how long Russia can do without foreign cash coming in and on how long the West can hold together. I expect the Arabs to start doing this again in earnest some day in coordination with Russia. (The next serious MidEast war should cause it.)
Their cash position is contracting. Western capitalists are making for the door and cash inflows from investment are way down. The big money guys are starting to see that the Russians can't be trusted to keep their mitts of foreign owned assets. Cutting off oil to the west will play hell in the short term. Medium term and beyond? They can't eat oil. And wars are expensive.
Well, if he does carry out the threat... Russia has shot the last bullet in it’s arsenal (outside of full-scale war).
Because after that, just what can Russia do to Europe and America should we... counterattack.
For example, Putin shuts off Western Europe’s oil and natural gas. So, then the US and EU shut down all trade with Russia.
What can Russia do about it? Outside of full-scale war... they have no more options.
And if there isn’t any more options, then the diplomatic game is lost.
Just off the top of my head ... maybe a majority of Americans don't want to see a large number of major American cities reduced to irradiated rubble over a small ex-SSR.
Fungible is not just a funky word. Russia is going to get hurt if they keep this up.
Exactly. Venezuala is a perfect example.
Chavez *HATES* America. But guess who they sell the most oil to?
Why? Cause if they don’t, Chavez will be out on his @ss in one of the quickest revolutions ever seen, for his oil money is buying loyalty.
Without it, he’s gone.
For us more than them.
Medium term and beyond?
We will pull ourselves out and replace the loss, but it will NOT (ever again) be cheap.
They can't eat oil.
They won't have to starve if anyone breaks the boycott.
And wars are expensive.
The way we fight them, Ruskies collect as they go, so it takes longer to cost them.
We could always count on help from the UN.
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!
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.
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.