http://registan.net/index.php/2007/04/05/the-great-oil-triangulation/ All Central Asia, All The Time Fri, 25 May 2012 03:15:21 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://registan.net/index.php/2007/04/05/the-great-oil-triangulation/comment-page-1/#comment-374177 Bonnie Boyd Fri, 06 Apr 2007 04:33:41 +0000 http://www.registan.net/index.php/2007/04/05/the-great-oil-triangulation/#comment-374177 Dear Joshua, You are right that Russia has an outsized influence over Eurasian oil transit, and you are also right that distribution avenues convey power as much or more than ownership at the wellhead does. It is a kind of dependency. EU states are pretending that they are acting in aggregate, but all of them are cementing bilateral and trilateral deals as fast as possible-just as you mentioned. The one smart thing the EU is doing is developing alternate energy sources. The EU-Russia Energy Charter isn't worth much as long as Russia holds the hammer and the price is high. Alternate technologies will not change the stakes, but it will make the fuel market a lot more complex. Of course, both Russia and Kazakhstan have uranium, too. The other complexity is that the rest of Russia's economy is still stagnating. We don't notice that they have development disease because oil prices have given them a lot of revenue. Russia has a huge treasury and has paid off a lot of debt on high oil prices, but little of that money has been invested in social goods or alternate exports. Clifford Gaddy at Brookings is all over this issue. After you listen to what he has to say for a sentence of two, you wonder why Europe is caving in so quickly. But I think it's a little tougher for Kazakhstan and Turkmenistan to anger the bear. Great post! One of my favorite topics. Bonnie Dear Joshua,
You are right that Russia has an outsized influence over Eurasian oil transit, and you are also right that distribution avenues convey power as much or more than ownership at the wellhead does. It is a kind of dependency.
EU states are pretending that they are acting in aggregate, but all of them are cementing bilateral and trilateral deals as fast as possible-just as you mentioned. The one smart thing the EU is doing is developing alternate energy sources. The EU-Russia Energy Charter isn’t worth much as long as Russia holds the hammer and the price is high. Alternate technologies will not change the stakes, but it will make the fuel market a lot more complex. Of course, both Russia and Kazakhstan have uranium, too.
The other complexity is that the rest of Russia’s economy is still stagnating. We don’t notice that they have development disease because oil prices have given them a lot of revenue. Russia has a huge treasury and has paid off a lot of debt on high oil prices, but little of that money has been invested in social goods or alternate exports.
Clifford Gaddy at Brookings is all over this issue. After you listen to what he has to say for a sentence of two, you wonder why Europe is caving in so quickly. But I think it’s a little tougher for Kazakhstan and Turkmenistan to anger the bear.
Great post! One of my favorite topics.
Bonnie

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