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August 11, 2008

Russia wants to control the flow of oil and gas through Georgia

Analysis of: Russians in Georgia as government forces push into rebel capita; | www.iht.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Hans Linhardt, PresidentHans Linhardt
President, LTDI, Inc.
Implications: After Georgian troops entered South Osettia - the brake-away part of Georgia under Russian influence- Russia sent tanks and troops into the region.

Analysis: One has to take a look at the map of Georgia, being situated on the Back Sea and controlling pipe line projects from Georgia under the Black Sea to Turkey and from Iran and Georgia to Turkey.  The latter is also known as the Nabucco gas pipe line in competition to the South Stream Russian project of Gazprom.  The developments are noteworthy:

•  Putin declared "war has started"

•  Medvedev, the president of Russia, has been quiet

•  Russia has recovered their military and geopolitical strength and is now flexing their military mussels to protect the flow of oil and gas in the Caucasus region 

•  Georgia has close ties with the United Sates and Nato

This is a very dangerous situation since the West can presently not win on the borders of Russia and Iran.  Russia will try to overthrow the present Georgian government and get control over Georgia.  This would be the end of the Nabucco pipeline project and eliminate any competition to Gazprom's South Stream project delivering natural gas avoiding Turkey and moving through Rumania and Hungary to the Austrian Baungarten hub of Southern European gas distribution. 

We have to hold our breath and see whether diplomacy has any chance to cool down the dangerous situation.  In any case their would now be less interest of the EU to finance the expensive Nabucco project due to the geopolitical uncertainty in the Caucasus region, being dominated by a newly reinvigorated Russia.    



  


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