US and Iran agree how to make Iranian gas available to western markets

May 06, 2009 02:00 AM

It is a new gesture and one that has been on close hold for some time. It was likely given added impetus owing to the announcement by the respective governments of Abkhazia and south Ossetia requesting for the presence of and endorsing the use of Russian Border troops to patrol inside their nation's borders.
These troops are the legacy of the old KGB border troops wearing the distinctive green and blue peaked caps. They are now under the control of the KGB successor force FSB.

Their significance is that they receive similar training as Russian Alpha troops and Spetznaz special force units. This development is a worrisome sign of an already tense bilateral relationship between Georgia and Russia.
Following the two week war last August the Russian's annexed the former Georgian loading port at Poti on the Black Sea and have built a major ongoing naval presence there that now forces Georgia to export crude oil transiting its borders from Kazakhstan Azerbaijan as well as natural gas via Turkmenistan and the other former CIS "Stans" via the terminus at Tuapse. BP, the operator of the pipeline allowing for crude oil transit from Chevron's Kazakhstan and other producers in Azerbaijan was forced to shut the line down for almost three weeks last August.

In another parlous development twelve people were murdered at the Oil Academy in Baku by forces yet unknown -- but who may have been contracted by the Russian "organs" for some wet work to stir up the pot so to speak. Far from harmonic the convergence of these events perhaps led the USG to speed up its announcement of favouring Tehran's use of the Nabucco outlet which, as I understand it, was on the agenda of the ongoing backroom discussions between the USG and RGI.
Certainly a nod in this direction is favourable to US interests in the G2K region, as the Russian's used the Georgian conflict to steal a march on its real coup -- that being the Assad government in Damascus rush to grant Russia a permanent naval facility for the Russian Navy atBanias and Tartous.

Work has been almost continuous as a flotilla of special operating ships ranging from grapnel and dredges as well as concrete pouring barges have accompanied the Russian fleet into Syria. Moreover the Iraqi federal government has sanctioned the re-opening of the 1 mm bpd pipeline between Kirkuk, via Mosul that will allow the export of northern sourced Iraqi crude from Kurdistan to makes its way into Syria to meet inland demand this freeing Syria and the Russian's by partnership to sell the attractive Souedie crude oil FOB and CIF ex-Banias and Tartous into the Mediterranean and northwest European spot and term markets.
In sum the Russians have made a grand re-entry into Middle East petroleum markets something that they lost when abandoning south Yemen and the PDYR government in 1990 with a follow on in Iraq during Desert Storm. More significantly, Russia's securing a permanent naval base in the Mediterranean accomplishes a strategic goal thwarted by the Turks and later the British during the Crimean War.

Syria gains a big power military presence and a diplomatic ally in the Kremlin which gives political avoirdupois in the effort to counter Washington's isolation of Syria. Iran and the USG share a similar desire to keep western Afghanistan from reeling out of control. Tehran wants to crack down on the heroin trade emanating from there as well as to stem the illegal and socially unwelcome exodus of Afghan refugees from the region.
The US, in supporting Iran, gains a silent partner at the least who can both mediate with the Taliban and/or crack down on them which perhaps will ameliorate the growing military resurgence in western Afghanistan where increasing numbers of US troops are being killed in renewed fighting.

Contributed by a Member of the GLG Energy & Industrials Councils.

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