Entry details

Chirol
Author

Chirol

Date

December 13th, 2006

Tags

Comments

5 Comments so far.
Add yours.

The Fallout Continues & Other Energy News

The consequences continue for Russia:

Azerbaijan To Stop Importing Russian Gas Next Year

December 12, 2006—Azerbaijan’s top energy official says Azerbaijan will stop importing Russian natural gas beginning in January.Russia’s Gazprom recently said it wants to slash gas imports to Azerbaijan and also double its price to $230 per 1,000 cubic meters. Natik Aliyev, minister for industry and energy, said Azerbaijan was not satisfied with Gazprom’s proposals and would replace Russian supplies with amounts from its own Shah Deniz gas field.

At this rate, there won’t be a drop of Russian gas in the Caucasus soon. Georgia has already announced it will stop buying Russian gas. Now Azerbaijan. It’s just poor little Armenia now. Outside the region, the Ukraine did the same and the EU is quietly diversifying. Great job Gazprom!

Russia’s current success bubble has been brought on by high energy prices. On top of that, it’s been consolidating Russia companies, bringing them under Kremlin control and forcing out foreigners. However, as Russia continues to create failed states and alienate all its customers, its window of opportunity to get back on the world stage may be shortening, thanks to Moscow.

Assertive Saudis

Meanwhile, the Saudis have unofficially made an interesting comment

…Saudi Arabia could cut world oil prices in half by raising its production, a move that he said “would be devastating to Iran, which is facing economic difficulties even with today’s high oil prices.”Â? The Saudi government disavowed Mr. Obaid’s column, and Prince Turki canceled his contract.

As the Saudis become ever more worried about a US pullout from Iraq and the resulting chaos, we’ll see them starting to play a bigger and hopefully more constructive role in the region. Isn’t this what the war was about anyway? (according to George Friedman of Stratfor)

SIDENOTE: An upcoming trip to the Caribbean, work and planning for my big trip in March is taking up a lot of my time. Apologies for the light and less substantial posting. I’m working on a longer post on hybrid regimes and Turkey to be out soon. Stay tuned and stay patien!

Comments to this entry

jon
December 13, 2006
5:00 pm
How much spare capacity do the Saudi's actually have at this point anyway? Unless they lied to the world a few years ago, when oil proces really spiked, they weren't able to make large increases in production quickly. So, unless they have spent the last couple of years making big improvements I really doub thtey have the ability to "flood" the market, like they did in the 80's to the Soviet Union.
Dan tdaxp
December 13, 2006
5:18 pm
The Saudis? Lie? Never! :-)

What would be neat is to come closer to Iran, which further decrease Russia's influence in her laughable near-abroad...
alec
December 13, 2006
8:08 pm
Jamestown Foundation had some interesting news on movement in the Russian energy market today as well:

"An unprecedented flurry of warnings by top Russian energy officials on a single day, December 12, may mark that date as a Black Tuesday for Western energy companies investing in Russia. First Deputy Prime Minister Dmitry Medvedev, Gazprom president Alexei Miller, Energy and Industry Minister Viktor Khristenko, and the unleashed "environmental"Â? scourge Oleg Mitvol targeted mainly Royal Dutch Shell; but they also threatened the interests of ExxonMobil, Chevron, BP, and other companies with heavy investments -- or, as may turn out, exposure -- in Russia.

Under the threat of suits by the Russian government for "environmental damages,"Â? Shell is being forced to yield control of its giant oil and gas project Sakhalin-2 to Gazprom. The consortium developing that project since 1994, Sakhalin Energy, currently consists of Shell as project operator with a stake of 55% and the Japanese companies Mitsui and Mitsubishi with 25% and 20%, respectively. Moscow is now forcing a redistribution along the following lines: 50% plus one share for Gazprom, 25% for Shell and another 25% for the two Japanese companies."
alec
December 13, 2006
8:13 pm
And, by the way, as someone who works in DC for a Palestinian organization (we're having a big event next Tuesday on the Baker-Hamilton if anyone is interested), the real hindrance for another regional alliance against Iran in the Middle East is the Palestinian question. The Saud's can't effective coalition build because the best backbone for such an alliance would be the militarily dominate Israeli's. But basically all countries in the region refuse until the question is settled.

By the way, I've had numerous chances to talk with Prince Turki and hear him speak, and regard him highly, even though he is a part of a system in Saudi Arabia I am deeply against philosophically. But, he abruptly resigned yesterday:

http://www.washingtonpost.com/wp-dyn/content/article/2006/12/11/AR2006121101333.html
Chief Wiggum
December 13, 2006
10:02 pm
Do you remember when President Bush looked into Putin's eyes and saw his soul? "I looked the man in the eye. I found him to be very straight forward and trustworthy and we had a very good dialogue. I was able to get a sense of his soul. He's a man deeply committed to his country and the best interests of his country and I appreciate very much the frank dialogue and that's the beginning of a very constructive relationship.":http://news.bbc.co.uk/2/hi/europe/1392791.stm

He was not the first.

Neville Chamberlain said he could do business with Hitler. Margaret Thatcher said she could do business with Gorbachev. Thatcher was mostly right. There will probably be a lot more Soviet Union-style government in Russia before there is liberal democracy.