Ambrose Evans-Pritchard
London Telegraph
August 28, 2008
Fears are mounting that Russia may restrict oil deliveries to Western Europe over coming days, in response to the threat of EU sanctions and Nato naval actions in the Black Sea.
Any such move would be a dramatic escalation of the Georgia crisis and play havoc with the oil markets.
Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for a supply cut to Germany and Poland through the Druzhba (Friendship) pipeline. It is believed that executives from lead-producer LUKoil have been put on weekend alert.
“They have been told to be ready to cut off supplies as soon as Monday,” claimed a high-level business source, speaking to The Daily Telegraph. Any move would be timed to coincide with an emergency EU summit in Brussels, where possible sanctions against Russia are on the agenda.
Read article
September 1, 2008 at 4:12 pm
This is really of no great surprise. Russia knows full well that if they reduce or halt supplies of oil, the impact will be immediate and dramatic to the economies of the world. Russia may lose revenues in the short-term, but when they switch the supplies back on, they will gain any lost revenues and more, from the higher prices. With most of the oil producers working a full capacity, the Russians know that they hold most of the cards. With our reliance of their gas, as well as their oil, the UK would do well to consider carefully the empty threats being thrown at the Russians, because the latter may just decide to target the UK first.
I am not advocating appeasement here, but we should be adopting a more considered approach to the problem at hand and we must not lose perspective.