Monday, September 1, 2008

And Russia bags two more

As a prize for successfully baiting the Georgians into war, Russia has scared Western investors out of Georgia, cementing control over oil and natural gas shipment through the Caucasus. This is quite a prize: since Iran is not a viable option, and Russia has proved to be a fickle supplier of energy, the only remaining route to the riches of the Caspian Sea is through the Caucasus. Russia effectively bought Armenia's favor earlier, and with the Georgian invasion, now has a bloc powerful enough to cower the only remaining Caucasian state still standing (albeit impotently, given it doesn't share a border with the Caspian): Azerbaijan.*

On the other side of the Caspian, an anonymous source inside energy giant Kazakhstan said that they were reconsidering the BTC pipeline, instead opting for transit through Russia. Kazakhstan's ambassador to the US wrote in to the WSJ later to deny the rumor, which would probably be the response no matter what they were really up to.

* The site is subscription-only, but it allows you to see articles if you click a link from Google. Just click the top link.

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