Tag Archives: natural gas

The Politics of Oil in Ukraine

The Russian government yesterday announced that a special pricing deal signed between the Ukrainian government and the Russian oil and natural gas company Gazprom would not be renewed. According to the Russian government, Ukraine currently owes more than $4 billion for previous shipments. But given deteriorating relations between the two countries and the desire of the Ukrainian government to develop closer ties with the European Union, Russia appears increasingly unwilling to offer favorable pricing deals to Ukraine.

This video, produced by the Russian news station RT, outlines the Russian position on the question.

What do you think? Is the Russian government justified in its decision to rescind the favorable pricing deal previously negotiated with Ukraine? If the goal of the Russian government is to punish Ukraine for looking to develop closer ties with Europe, will this move be successful? Can Russia use its oil and natural gas wealth as a foreign policy tool?

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Five Stories You Might Have Missed

The major news networks yesterday were giving virtually non-stop coverage to the upcoming inauguration of President-elect Barack Obama.  Obama is already on his journey to Washington DC for Tuesday’s inauguration.  In his weekly radio address, President-elect Obama warned of the challenges facing the nation, the most critical of which include unpopular wars in Iraq and Afghanistan and a global economic crisis.  Despite the challenges, however, the television news networks focused extensively on the pomp and circumstance of the ceremonial inauguration itself. 

Here’s five important stories you might have missed among all the ceremony:

1.  Hamas and Israel reached a one-week ceasefire on Sunday, temporarily halting the three-week old conflict which has already resulted in more than 1,100 Palestinian and 13 Israeli deaths.  The political fallout of the conflict also looks to be severe, with Qatar and Mauritania announcing they would terminate political and economic ties with Israel over the conflict. With the largest Muslim and Jewish comminutes in Europe, France is also bracing for an increase in sectarian violence between Jewish and Muslim communities.

2. After signaling that a deal had been reached last week and then seeing that deal collapse, Russia and Ukraine announced on Saturday that they had again reached an agreement which would permit Russia to resume natural gas shipments to the European Union.  Russian natural gas supplies are normally shipped through pipelines in Ukraine, and these shipments account for approximately twenty percent of the E.U.’s total natural gas consumption.  In the new one-year agreement, Russia offers Ukraine a 20 percent discount on natural gas prices in exchange for a promise not to increase transit fees for using the pipeline.  Some countries in Eastern Europe have been without heat for twelve days as Russia and Ukraine struggled to come to a solution to the standoff.  But political wrangling in Ukraine could still derail the deal.

3.  Ethiopian troops completed their planned withdrawal from Somalia’s capital, Mogadishu, on Thursday.  The withdrawal raises concerns about the viability of Somalia’s pro-Western government and the increasing influence of Islamic extremists in the country.  Ethiopia threatened to withdraw its forces several months ago, complaining that the international community had not provided sufficient resources to support its mission and the government of Somalia.  In the absence of Ethiopian or other military forces, it is feared that Somalia may expand its reputation as a home to Islamic terrorists.

4.  There is growing speculation that Fidel Castro, former president of Cuba, may be in grave health.  Castro has not appeared in public since July 2006, and has recently cancelled a number of meetings with foreign dignitaries.  In a public speech on Sunday, Venezuelan President Hugo Chávez, one of Castro’s closest allies, appeared to offer his eulogy, noting “That Fidel is his uniform, who walked the streets and town late at night, hugging the people, won’t return.  That will remain in memories.”  Fidel’s brother, Raúl Castro, has served as president of Cuba since July 2006, when his brother was forced to resign for health reasons.  Since then, the economy of Cuba has struggled, the extensive welfare protections afforded workers have begun to decline, and the government has begun to promise greater openness and transparency.

5.  A closely fought by-election in Malaysia has been won by the Pan-Malaysian Islamic Party, part of the country’s Islamic opposition.  While the results will not alter the balance of power in the national parliament, they do raise concerns about the ability of the incoming National Front government to effectively govern.  

And for two bonus stories this week:

6.  In Japan, sharp divisions are appearing in the Liberal Democratic Party, the party which has ruled Japan for all but 11 months in the past 53 years.  Yoshimi Watanabe, who served as state minister for administrative reform from 2007 to 2008, tendered his resignation from the party last week amid the declining popularity of the party with the electorate.  The opposition Democratic Party of Japan appears well-positioned to win the next national election, which must take place by September. 

7.  Iran’s ex-Prime Minister, Mir-Hossein Mousavi, may run as a candidate in the presidential elections scheduled for June.  Mousavi is widely seen as a reformist candidate possessing the popularity to potentially defeat incumbent president Mahmoud Ahmadi-Nejad.

Five Stories You Might Have Missed

Despite the passage by the United Nations Security Council of a resolution calling for an immediate ceasefire, Israel continued its offensive in Gaza over the weekend.  The resolution was passed by the United Nations with the United States abstaining, marking the first time the United States has permitted a resolution opposed by Israel to pass.  Hillary Clinton, the incoming Secretary of State, is expected to deliver a speech on the Middle East next week, and speculation is that the speech may provide some insight into the policy of the Obama administration.

In other news from the last week:

1. More bleak data released last week dampened hopes for a speedy recovery from the global economic crisis.  On Friday, it was reported that the United States lost more than 2.6 million jobs in 2008 and the unemployment rate jumped to 7.2 percent in December—the highest level in 16 years.  Similar figures indicated that the United Kingdom and continental Europe are also suffering from falling economic output and rising unemployment

2. Russia and Ukraine reached a deal on Saturday aimed at restoring Russian natural gas shipments to the European Union.  The deal, which has yet to be formally signed by Ukraine, would permit European Union, Ukrainian, and Russian observers to monitor a pipeline that transports Russian gas through Ukraine to the E.U.  The European Union hopes the deal will prevent future disputes over the pipeline, stabilizing shipments to E.U. member states.

3. After receiving a ransom payment of U.S. $3 million, Somali pirates released a captured Saudi oil tanker sized last fall.  After the United Nations authorized military action against the pirates late last year, a number of countries have moved naval forces into the region in order to cut the level of piracy in one of the world’s busiest shipping lanes.

4. A three-day long strike by employees of state-owned energy companies in India ended on Friday.  The striking workers failed to garner popular support for their demands, and the strike, which resulted in fuel shortages throughout the country, became highly unpopular. 

5. A U.S. businessman with ties to the State Department and Central Intelligence Agency has purchased lease rights over 400,000 hectares of land in Sudan.  The purchase becomes the largest private land deal in post-colonial Africa, but raises concerns over the increasing foreign control over the continent’s agricultural land.

Five Stories You Might Have Missed

The conflict between Hamas and Israel in Gaza continued this week, with Israeli air strikes and rocket attacks by Hamas through much of the week culminating with an Israeli ground attack over the weekend.  So far, more than 400 Palestinians and 4 Israelis have been killed in the fighting.  A Libyan-sponsored United Nations resolution calling for an immediate ceasefire was blocked by the United States on Saturday.  Meanwhile, some international observers warned that the use of military force will not achieve a stable solution to the Gaza conflict

In other news from the previous week:

1.  The Chinese government has moved to isolate dissidents who support Charter 08.  The Charter, often referred to as the most significant push for opening the one-party state in China since the Tiananmen Square protests, has been signed by 7,000 Chinese and foreign intellectuals.  The Charter warns of “the possibility of a violent conflict of disastrous proportions” if the Chinese Communist Party does not move towards greater democratization and political openness. A number of signatories to the document have been detained by police, and the government has cautioned the media against carrying interviews with the Charter’s signatories.

2.  Tensions between Russia and Ukraine are growing as both sides seek to mobilize support for their position in Europe.  Russia cut off natural gas flows to Ukraine last week, accusing the Ukrainian government stealing gas from the pipeline; the Ukrainian government denies the charges.  The standoff is a major concern for several members of the European Union, which secures up to 20 percent of its natural gas demands through the disputed pipeline. 

3.  Cuba celebrated the 50th anniversary of the Cuban revolution on January 1.  The revolution led to the overthrow of the dictatorial government of Fulgencio Batista and the establishment of a communist state under the leadership of Fidel Castro.  The resignation of Fidel Castro earlier this year, the economic slowdown on the island, and the devastation brought by two hurricanes have left the country in crisis.  As a result, celebrations of the revolution were scaled back.  The future of U.S.-Cuban relations is likely to be a significant policy question for the incoming Obama administration.

4.  John Atta Mills, the leader of the opposition National Democratic Congress, was declared the winner of Ghana’s presidential runoff elections on Sunday.  He defeated Nana Akufo-Addo of the ruling New Patriotic Party to win the presidency in elections characterized as free and fair.  Ghana has long been viewed as the model for political and economic reform in Africa, and the peaceful political transition in Ghana is viewed as a model for other struggling countries.

5.  On Friday, the government of Sri Lanka announced it had seized control of the northern town of Killinochchi in the northern part of the country.  Sri Lanka has effectively been divided in half for years, with the northern part of the country under the de facto control of the Liberation Tigers of Tamil Eelam (the Tamil Tigers) and the southern part of the country under the control of the Sri Lankan government.  The government’s victory in the Tiger stronghold of Killinochchi is widely seen as a dramatic blow to the Tamil Tiers.