We are indeed at a rapidly changing scenario with respect to the rise and fall of some oil-rich countries.
Here are some excerpts from Global Envision, affiliated with the Mercy Corps, and our analysis….
“Another leader recently challenging Washington is Russian President Vladimir Putin. He threatened to point his military's nuclear missiles at European cities, if Bush extended the present California-Alaska anti-missile defense line to Poland and the Czech Republic. This threat was the latest illustration of a radical change in the Kremlin's foreign policy, with Putin repeatedly attacking Washington's stance in the international arena.”
His tough stance stems from the soaring wealth created by the extraction of Russia's enormous hydrocarbon reserves and his policy of bringing the leading Russian hydrocarbon companies under the control of the Kremlin and using them as an instrument of Russia's foreign policy.”
Our take : we are already seeing Russia putting in a missile battery system to the west of Poland, which can be a potential threat to NATO. There was also this incident of a Russian missile striking a field in Georgia, which is unprecedented since the end of the Cold War.
More…
“Four years ago Russia overtook the US to become the world's second largest oil producer after Saudi Arabia. Last year Gazprom, a Russian company, forged ahead of BP as the globe's second largest energy corporation by market value.
With petroleum prices rising fivefold between 1998 - when the Russian ruble crashed, forcing the Kremlin to beg for foreign financial aid - and now, the Russian treasury is overflowing with cash. It has since paid off its foreign loans and built up a foreign exchange nearing $300 billion.
Another example of oil riches enabling a country's leaders to act with uncommon resolve is Iran. Its refusal to suspend enrichment of uranium demanded by the United Nations Security Council has led to two sets of sanctions against it. But these have proved ineffective. Iran's exports are rising and the high oil prices mean that the government can go on using the hydrocarbon revenue on subsidies for food and fuel at home. “
Our take:
We can now see a nexus of Russia-Venezulea-Iran, quite formidable in itself….but the equation changes drastically if China also joins in. It is time to calculate what the total oil reserves plus production would be of these 3 or 4 powers....
