Thursday, July 13, 2006

"BTC" oil pipeline opens bypassing Russia & Middle East

Europe is less dependent on Russian oil starting today, July 13, due to the opening of the second-longest pipeline in the world with a capacity to deliver more than one million barrels of oil per day by 2008. The timing is prescient in light of world oil prices reaching $76 per barrel due to geopolitical tensions in Nigeria and the Middle East.

Drawn from the Central Asian states of Kazakhstan and Azerbaijan, the pipeline represents a huge step toward securing safe access to needed oil reserves and de-coupling the region's dependence on its former Russian master. It also avoids the volatile Middle East, giving world markets an important alternative supply.

Last winter without warning, Russia doubled the prices of energy to both Georgia and the Ukraine after pro-Russian administrations were ousted by mass protests. Russia claimed the price hike simply mirrored market prices, but Washington blasted the move accusing Moscow of strong-armed tactics. Much to Moscow's irritation, US Special Forces have been sent to Georgia to help protect the pipeline as the region is one of most volatile in the world.


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