"Russia may cut off oil supplies to the West"

#1
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.

Any evidence that the Kremlin is planning to use the oil weapon to intimidate the West could inflame global energy markets. US crude prices jumped to $119 a barrel yesterday on reports of hurricane warnings in the Gulf of Mexico, before falling back slightly.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/29/cnrussia129.xml
 
#3
The Russian tough-guy stance may end up driving the developed world to alternative energy supplies in a big hurry and investment in non-energy sectors out of the country.

In the end it may turn out to be the stupidest foreign policy stance of the early 21st century, even compared to Bush in Iraq.

Just as needless as well.
 
#4
agreed virgil. it also highlights how stupid labour has been in growing our dependance on russian resources while simultaniously drastically reducing our defence capabilities. worring times ahead.
 
#5
No doubt the headless chickens will rush to the oil futures and send the price back up again. :roll: War bonds anybody?
 
#6
Virgil said:
The Russian tough-guy stance may end up driving the developed world to alternative energy supplies in a big hurry and investment in non-energy sectors out of the country.

In the end it may turn out to be the stupidest foreign policy stance of the early 21st century
Agreed. No cash, no friends, no people, no Russia.

No tears.
 
#7
Think about it

Cut off the oil supplies = cut off all the income from those supplies

The west would suffer big time but would survive. What would the lack of oil / gas income plus the following economic sanctions do to Russia?

They are nowhere near self sufficient and need the West more than we need them
 
#8
Aunty Stella said:
Think about it

Cut off the oil supplies = cut off all the income from those supplies

The west would suffer big time but would survive. What would the lack of oil / gas income plus the following economic sanctions do to Russia?

They are nowhere near self sufficient and need the West more than we need them
Which is why this story is almost certainly bollocks. It's irresponsible as well, because it gives the traders an excuse to drive energy prices up yet further.
 
#9
Maggie and Ronnie warned “the West” against increased dependency on Russian/Soviet oil. Guess no one was listening, not to mention former Chancellor Schroeder is working for LUKOil/Gazprom and getting rich flogging Russian oil to Germany.

This move by Putin was expected, is called economic blackmail. Hey west you go along with us or we cut off the oil, causing your people to pay more for all goods and services

Putin doesn’t care about losing a few bucks from the west, he’s banking on the fact that it will be a short term short fall as the west will capitulate and toe the Russian line.

Is a risky move and may blow up in Putin’s face, but what else does he have left?
 
#10
99% BS story, the Russian's, as pointed out already , need our cash more then we need their oil and gas, (they account for what about 30% of our oil and slightly more then that in gas?)....oh dear decreased flight's to Antigua and less Land rover's being sold to solicitor's in cities :p
there oil and gas recovery and exploration is already falling apart/or not happening, there are some studies that their oil production may peak (if it has not already) in the next decade, after that it's down hill, gas may last a little longer, but doing something like restricting Europe's supplies will only increase the search for alternatives , which are even now speeding up, they'd kiss their market goodbye in less then 2 decades...is Ivan that reckless?

one of the funny thing's I found out is, that the Russian's buy their oil back off European countries after processing because they don't have the refineries themselves....
 
#11
petergriffen said:
99% BS story, the Russian's, as pointed out already , need our cash more then we need their oil and gas, (they account for what about 30% of our oil and slightly more then that in gas?)....oh dear decreased flight's to Antigua and less Land rover's being sold to solicitor's in cities :p
there oil and gas recovery and exploration is already falling apart/or not happening, there are some studies that their oil production may peak (if it has not already) in the next decade, after that it's down hill, gas may last a little longer, but doing something like restricting Europe's supplies will only increase the search for alternatives , which are even now speeding up, they'd kiss their market goodbye in less then 2 decades...is Ivan that reckless?
Not to mention no western finance house lending them money for exploration, and after the BP fiasco most of big oil will look elsewhere for exploration opportunities, where the politicians are pliant and easily bribed so they won't get dicked out of their investment.
 
#12
petergriffen said:
99% BS story, the Russian's, as pointed out already , need our cash more then we need their oil and gas, (they account for what about 30% of our oil and slightly more then that in gas?)....oh dear decreased flight's to Antigua and less Land rover's being sold to solicitor's in cities :p
there oil and gas recovery and exploration is already falling apart/or not happening, there are some studies that their oil production may peak (if it has not already) in the next decade, after that it's down hill, gas may last a little longer, but doing something like restricting Europe's supplies will only increase the search for alternatives , which are even now speeding up, they'd kiss their market goodbye in less then 2 decades...is Ivan that reckless?
All this talk about alternatives is nice but a pipe dream. If someone was able to produce a viable alternative to the internal combustion engine (hydrogen, CNG, etc...) today it would be at least 10 years before they would become commonplace and useable.

First the existing stock of diesel and gasoline powered vehicles would need to continue to be supported, until they are phased out. That means the “traditional” filling stations would need to continue to exist and need to be supplied.

Second new filling stations or existing filling stations would need to be built or modified for the “new” fuel. This costs money and at least here in the US most are owned by small businesses and that is an expense outlay most can’t afford. FYI major oil companies are closing or divesting existing filling stations.

Third a new distribution system would need to be developed including production plants, fuel dispensers, etc...

Of course all this can’t happen overnight or at the same time.

Hybrids are a short term solution, as they use traditional fuels, yet extend mileage.

Our economy is oil based, and not just to heat homes or fuel vehicles. Byproducts from the refining process are used to build roads, create medicinal remedies, plastics, building materials, etc…

In short oil is with us for years to come and no alternatives will be able to change that anytime soon. Putin for what it’s worth has the West by the balls! 30% is no small amount, especially when you consider that transportation via a pipeline is significantly cheaper and more efficient then bringing it in by ship.



petergriffen said:
one of the funny thing's I found out is, that the Russian's buy their oil back off European countries after processing because they don't have the refineries themselves....
Not sure about Russia but I know that Iran does the same, that is buy back the refined product as they have no refining capacity.
 
#16
SkiCarver said:
agreed virgil. it also highlights how stupid labour has been in growing our dependance on russian resources while simultaniously drastically reducing our defence capabilities. worring times ahead.
This nation's dependence on energy from left wing dictatorships and Islamist theocracies cannot be allowed to continue indefinitely. I think moving to alternative energy sources will definitely be on the cards.

I sometime wonder to whom New Liabour have pledged their loyalty. The Crown or Mother Russia?

SLR (Not to be confused with SLR Boy)
 
#17
It'll hurt Russia far more than us. I see two results of this:

1) Western Europe depends less on Russian oil and gas (no bad thing IMO) but more on ME at least in the short term (a very bad thing IMO);

2) Russia finds alternative markets to the south and east. India and China in particular are prepared to gobble up everything that can be produced, so an incentive for Ivan to invest a bit in his Far East infrastructure. Also an incentive to create friendly (to them) stable governments on pipeline routes to the south. That's something that should set alarm bells ringing this side.

That's a medium-to-long term scenario, though. Russia need to tighten his belt a bit if he's to afford this kind of investment - who's buying his product in the meantime?
 
#18
That's a medium-to-long term scenario, though. Russia need to tighten his belt a bit if he's to afford this kind of investment - who's buying his product in the meantime?
Apart from oil and gas, no one really. As one columnist I read recently wrote 'They don't even make a toaster that anyone beyond Russian borders would be willing to buy'.
Still, having lots of oil and gas does have it's own benefits, but Russia still needs the outside world to keep going.
 
#19
Russia is dependant on food imports from the West. If it cuts off oil, we cut off grain. China is the world's largest importer of food, so they can't help the Russians, neither can the Japanese. Russia will begin to starve.

Miliband is talking us into another Cold War when it isn't either necessary or in our interest.
 
#20
Bravo_Zulu said:
Russia is dependant on food imports from the West. If it cuts off oil, we cut off grain. China is the world's largest importer of food, so they can't help the Russians, neither can the Japanese. Russia will begin to starve.

Miliband is talking us into another Cold War when it isn't either necessary or in our interest.
Here's an interesting little gizmo which shows food exports/imports as assessed by the UN Food & Agriculture Organisation.

Mother Russia's teats seem to be awfully dry.
 

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