SeriousBull

Another War for Oil?

Tags: + Bush + Energy + Georgia + investing + NATO + Oil + Putin + Russia + South Ossetia

Geo-Politics is about power and and hegemony–when circumstances permit the nation with the advantage exercises its power to achieve domination.  Following the collapse of the Soviet Union the new Bush Administration realized this was the American moment. And with that realization American foreign policy was remade from something to idealize into something to despise without legitimacy. It began with overt efforts to co-opt the former Soviet states into joining NATO, and culminated in the Bush Administration’s irrationally dangerous policy of ‘Preemptive Strike’– the right (justification) of the US (but not others?) to invade another country (IRAQ) because it claimed it was threatened. Along the way it also became justification for the unilateral renouncement of International Treaties (ABM, SALT & the Geneva Convention) and the catylist for corrupt domestic and international politics leveraged on fear and reprisal to any opposed. Former Russian Presidents Gorbachev and Yeltsin were misled by US ‘Democratic’ initiatives. They began to witness separatists movements by Ukraine, Georgia, the Balkin states, and others all ultimately supported by the US and NATO under the right to self-determination banner. With Russia quite literally losing ground, it fell to Vladimir Putin to understand the implications of the new American geo-politic. Having been dethroned as a superpower and humiliated, Russia had only one Ace to play– consolidate its control over the energy supplies into Europe and the NATO alliance. And so that is just what Russia began to plot and is attempting to complete.

The US recognized Putin’s counter-measure strategy and in 2003 supported (installed?) a US backed friendly government in Soviet Georgia sending peacekeepers and military assistance to train Georgian troops to defend themselves. The US/NATO real strategic plan was to  bypass Russia’s oil distribution lock-hold on Europe by establishing an alternative West controlled energy corridor southward via the Caspian Sea region to connect central Asia to Europe. But to accomplish this Georgia would need to control South Ossetia because the BP oil pipeline to Turkey runs nearby it about 60 miles from Tskinvali, its capital city. 

Russia’s Putin had earlier rejected a Bush/Cheney proposal to build a joint-venture southern pipeline financed and managed by US oil companies and contractors.  Instead, Putin devised his own plans to thwart US hegemony and block US displacement of its valuable, European oil monopoly. And therefore for strategic reasons Russia recognized the independence of South Ossetia from Georgia after a democratic referendum was held on November 2006 by the 75,000 South Ossetian citizens resulting in their declaration of independence from Georgia. Likewise Russia accepted the independence of Abkhazia and Ajarian, both threshold provinces aligned at least by history with Russia blocking the West’s alternative pipeline dream.

All this background explains why this weekend Russian President Medvedev and Prime Minister Putin acted decisively to move the Russian army into South Ossetia to put down Georgia’s military aggression against South Ossetia to cease control of the strategic real estate. President Bush was advised of the military action by Putin at the Beijing Olympics and was reportedly furious. Georgian President Saakashvili for his part orchestrated Georgia’s invasion of South Ossetia while declaring that Russia’s response was disproportionate to its military actions. Russia undoubtedly views Georgia’s invasion of South Ossetia as further hegemony by the West and almost certainly believes Georgia’s move was covertly sanctioned (and planned?) by NATO. No doubt other nations are taking preditable sides along their East-West alliances as this war is erupting and has the potential to expand.

Medvedev and Putin have criticised Georgia’s aggression and stated that Russia acted to defend their peacekeepers stationed in South Ossetia. For now obvious reasons one can understand the importance of Putin’s warm congratulations to Chinese President Hu Jintao on their wonderful Olympic Games’ ceremony. One can also bet that Putin reiterated Russia’s unwavering support of their one-China policy.  Indeed if real people were not pawns in this Geo-politic, one could also imagine all this hegemony as a chess board with Putin  and Medvedev now declaring to Bush and NATO: Checkmate.  For the bystanders the economics surely mean oil supplies will be disrupted and energy prices will rise again. Moreover, it will be interesting to watch the on-going actions. Russia will likely maneuver for a gain in the outcome believing Georgia and the West need punishment, while the Georgia and the West will surely seek a return to the previous status quo until another plan can be hatched.

August 10, 2008 - Economy, Markets, Politics