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The Return of Gazprom

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gaspromThe December 1991 collapse of the USSR was an unmitigated disaster for all 15 nations emerging from the desiccated carapace of the Soviet Union.

Now, like a plate of mercury smashed with a hammer, rivulets of the former USSR member state's energy assets two decades later are trickling back under the control and influence of Eurasia largest energy concern, Gazprom.

All the new post-Soviet states faced the triple problems of raging hyperinflation, evolving ad hoc nationalistic policies and, perhaps most importantly, coping with the detritus of Union-wide systems that suddenly deposited fragments of their former selves on the territories of the new nations.

Of these debris fields, the three most important were the former USSR's communications, transport and energy grids. Working out new relationships between the nations emerging from the USSR's demise was a long, convoluted process, given that all three systems as a whole had been designed to serve the Soviet Union as a whole, rather than its constituent republics.

Of the three above-mentioned legacies, the communications and transport networks were relatively easy to resolve - slap a new coat of paint on the railway carriage, name it after the new national railway, problem solved.

The real trauma amongst the post-Soviet states began over the USSR's energy infrastructure. Designed originally to benefit the USSR as an autarkic entity, the Soviet Union only began in the late 1970s to export its energy riches, the energy resources and natural gas and oil pipelines and electrical transmission lines suddenly became national assets, to be exploited for maximum benefit, even if it meant hammering the neighbouring economy of a former fraternal Soviet socialist republic.

And the organization with the 800-lb hammer is the Russian Federation's state-owned national gas company, Gazprom.

Of the post-Soviet space's energy assets, two loomed above all of interest to Gazprom.

In the energy-poor former western republics of the USSR, their extensive pipeline networks, particularly those of Ukraine and Belarus, that had been developed beginning in the mid-1970s not only to supply their indigenous needs but to transmit soviet gas to the burgeoning markets of Europe, despite the disapproval of the Reagan administration.

Farther east, the item of interest were the natural gas assets of the Soviet Central Asian "Stans," which could be used to meet heavily subsidized Soviet domestic requirements while natural gas produced in the Russian SSR could be shipped westward to the rich capitalist Europeans.

Two recent developments have indicated that Gazprom has advanced on the chessboard in both directions.

First, as regards Belarus, earlier this month Belarusian Prime Minister Mikhail Myasnikovich stated that Minsk is prepared to sell the country's Beltransgaz pipeline network to Gazprom, a development which the Belarus government had resisted for two decades.

The reason? The crushing debt, even at subsidized prices, owed by Belarus for Gazprom natural gas shipments.

Farther east, Gazprom has extended its influence in Kazakhstan, the second biggest energy producer in the former Soviet Union and Russia's closest Central Asia ally, despite the vast country being a darling of Western energy companies for its Caspian reserves. Earlier this month Gazprom announced that it had appointed Timur Kulibayev, son-in-law of Kazakh President Nursultan Nazarbayev, to its board of directors. Gazprom CEO Aleksei Miller noted that Kulibayev was a good choice because Russia and Kazakhstan have common oil and gas interests and that Gazprom was planning large projects in Kazakhstan. Given Kazakhstan's landlocked nature, that can mean only one thing - pipelines.

Kulibayev, who is chairman of the board at KazMunaiGas, is also chairman of the supervisory board of Samruk-Kazyn, the Kazakh National Welfare Fund, which controls the state's stakes in a swathe of the country's key industries, including KazMunaiGas and has assets of $80 billion.

What does this mean for Western energy companies, which have ploughed more than $80 billion into developing Kazakh energy assets over the past two decades? Unclear - but as one analyst observed, "Americans play checkers, and the Russians play chess."Under this metaphor, it would seem that Putin is moving closer to declaring "checkmate" over Western penetration of the energy assets of the post-Soviet space.

Source: http://oilprice.com/

By. John Daly of OilPrice.com

Russian NavyIn the past three decades the Islamic Republic of Iran has developed a well-earned sense of paranoia. First, in September 1980 Saddam Hussein invaded Iran in what he thought would be a quick military victory, but which quickly turned into an eight-year bloody slugfest, leaving an estimated 500,000-1,000,000 dead before the guns fell silent.

More recently Iran has been subjected to increasingly militant rhetoric from both Tel Aviv and Washington over its civilian nuclear energy program, with thinly veiled threats of possible military action if Tehran does not abandon its efforts, even though they are completely complaint under the terms of the Nuclear Non-Proliferation Treaty (NPT), which Iran has signed.

Now however, potential is brewing for Iran from an unexpected direction - the north.

Russia is sharply increasing its military presence in the Caspian. Russian Federation Navy Commander in Chief Admiral Vladimir Vysotskii has stated that Russia's Caspian Sea Flotilla will receive up to 16 new ships over the next decade, while some aviation units will be transferred to the Navy from the Russian military's southern operational-strategic command. What has really got to have the mullahs in Tehran fingering their worry beads however is Vysotskii's promise to provide the Caspian Sea Flotilla with Bastion shore-based missile systems armed with Yakhont hypersonic missiles, which are designed to destroy surface targets at distances of up to 200 miles.

Russia's Caspian Sea Flotilla flagship, the Tatarstan frigate, is already the most powerful vessel on the Caspian, armed with Uran missiles with a range of 100 miles. Later this year the Tatarstan will be joined by a sister ship, the Dagestan.

The Caspian Sea Flotilla is also taking delivery of the first in a series of new Project 21631 Buyan-M-class rocket-artillery ships, along with three amphibious assault ships.

The Iranian Navy has a total of approximately one hundred, mostly small combat and supports ships on the Caspian. They include three Iranian-made midget submarines (of a North Korean type that can transport a group of combat divers and have a range of 1,200 miles), an outdated Salman-class minesweeper (American-made), and patrol cutters.

Russian analysts believe that Iran however has the ability to increase its Caspian naval forces by 50 percent in short order by relocating craft from the Persian Gulf.

As for the other Caspian littoral states - Azerbaijan, Turkmenistan and Kazakhstan, their naval forces are negligible, to be polite.

So, why is Russia beefing up its naval presence?

miss_atom_2009Japan's 11 March catastrophe at its six-reactor Daichi Fukushima nuclear power complex has had global repercussions, hardly surprising given the trillions of dollars invested in civilian nuclear energy over the last five decades. Ironically, just a year ago the nuclear power industry saw itself on the verge of a renaissance, with worldwide concerns about global warming causing many to reconsider the merits of nuclear energy, which produces no greenhouse gases.

Events in Japan changed all that, and hit the "big three" exporters of civilian nuclear power technology hard - the U.S., France and the Russian Federation.

While the first two may have thrown up their collective hands in despair Moscow is rising to the challenge, seeing a potential silver lining in the nuclear cloud.

Quite aside from finishing Iran's controversial Bushehr nuclear reactor, Russia's nuclear industry is now offering a wide variety of services, from constructing NPPs to decommissioning them.

Last week Chilean Senators Guido Girardi, Jorge Pizarro, Fulvio Rossi and Gonzalo Uriarte flew to Moscow, where they met with various high level government officials, including Russian Energy Minister Sergei Shmatko, who, according to a report in Santiago's "El Mercurio" reportedly "surprised" the delegation by offering to build a nuclear plant in Chile. The nonplussed South American legislators responded that after the events in Japan it was "unthinkable" to build in Chile because the idea faced "great public opposition." Ever willing to be accommodating, Shmatko then promised his help in developing a pilot project for tidal energy in Chile.

Such shilling aside, Russia's state nuclear concern Rosatom according to its press office has formed a special company, Rosatom Finance, to provide foreign currency funding to its enterprises. Rosatom Finance is registered in Cyprus and is wholly owned by OJSC Atomenergoprom and will provide financial support to Russian companies involved in nuclear energy such as CJSC Atomstroiekhsport, which builds nuclear power plants abroad, nuclear fuel producer TVEL and nuclear materials exporter Techsnabekhsport, among others.

Nuclear Twilight in Europe

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International Atomic Energy AgencyIt is becoming evident to many that the March nuclear catastrophe at Japan's six reactor Daichi Fukushima complex has dealt a huge, possibly fatal, blow to the nuclear industry's hopes of a revival.

A year ago even global warming enthusiasts reluctantly embraced nuclear power as a carbon-free energy generating system, and the industry was ramping up for glory days as a result.

The triple whammy against nuclear power beginning with the 1979 partial meltdown at Three Mile Island, followed by 1986's Chernobyl disaster and now Fukushima, effectively present a "three strikes and you're out" call against civilian nuclear energy power generation for the foreseeable future.

That said, with the trillions of dollars already invested in 436 nuclear power plants (NNP) worldwide, according to the International Atomic energy Agency (IAEA), the industry has begun to push back, and "ground zero" is emerging as Europe, not Japan, with the lawyers circling.

In the wake of Fukushima, German Chancellor Angela Merkel announced on 30 May that Germany, the world's fourth-largest economy and Europe's biggest, would shut down all of its 17 would abandon nuclear energy completely between 2015 and 2022, an extraordinary commitment, given that Germany's 17 NPPS Germany produce about 28 percent of the country's electricity.

If Berlin's announcement sent nuclear power proponents seating, worse was to follow, as Switzerland is examining a proposal to phase out the country's five nuclear plants by 2034.

Finally, if any doubts existed about Europe's commitment of nuclear energy, on 12-13 June in a referendum in which 56 percent of Italian voters participated, an eye-watering 94 percent voted against nuclear power. Following the 1987 Chernobyl disaster, Italy decided to shut down its four NPPs and the last operating plant closed in 1990. Three years ago Prime Minister Silvio Berlusconi reversed this decision but after Fukushima Berlusconi announced a one-year moratorium on his plans for new nuclear power plants, intending to restart Italy's nuclear energy program in 2014. Berlusconi spent the days leading up to the polls challenging the nuclear power measure in court, declaring he wouldn't vote and suggesting his fellow Italians stay at home too. They didn't, and Berlusconi's electoral defeat has ended nuclear possibilities for Italy for the foreseeable future. In 2010, 22.2 percent of Italy's power came from renewable energy sources. 64.8 percent were from fossil fuels, and 13 percent were imported sources, including French nuclear power. The stinging defeat at the polls is a boon for Italy's nascent renewable energy industry.

The German nuclear industry has begun to fight back, insisting that its shutdown would cause major damage to the country's industrial base. Utilities E.ON AG and Vattenfall Europe AG have already announced that they will seek billions of euros in compensation, and RWE AG and EnBW Energie Baden-Wuerttemberg AG are expected to follow soon. Germany's four nuclear operators have already announced they will stop paying into a government renewables fund, which was set up in September 2010 as compensation for longer nuclear life-spans.

In such an environment, the only nuclear energy growth field currently is lawyers' fees.

Source: http://oilprice.com/

By John Daly for OilPrice.com

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UBSA former UBS banker now working in Credit Suisse charged with helping American account holders hide as much as $500 million in offshore assets to avoid taxes has been granted bail by a federal court judge. Christos Bagios who worked for UBS Bank of Switzerland was held in custody since January 26 but has now been granted bail of $500,000 corporate surety bond and $150,000 cash bond by US Magistrate judge Robin Rosenbaum. Judge Rosenbaum also ruled in Fort Lauderdale that the prosecution has probable cause to charge Bagios of conspiring to defraud the US government by impeding the IRS.

In 2009, UBS Bank was granted a moratorium from criminal prosecution by paying a fne of $780 million to the US government for helping American taxpayers dodge taxes using their offshore bank accounts. The bank also had to divulge details of thousands of its hitherto secret bank accounts belonging to wealthy Americans suspected of tax evasion.

Judge Rosenbaum made public a criminal complaint that Bagios helped between 100 and 150 American taxpayers evade taxes through their bank accounts. However, Bagios himself maintained that he was not aware he
was abetting tax evasion, according to Arthur Greenspan, his lawyer.
 
Judge Rosenbaum ordered that Bagios undergo electronic monitoring and remain in South Florida. Bagios, 45 is a Greek citizen residing in Switzerland. He joined Credit Suisse Private Advisors in 2009 after a career spanning 15 years at UBS Bank.

Bagios conspired with another UBS banker, Renzo Gadola who pleaded guilty to conspiracy in December. According to Gadola, he and Bagios were 'part of a team of UBS bankers who serviced hundreds of undeclared accounts at UBS owned and controlled by US taxpayers'. 17 of those clients stepped forward and disclosed their accounts to the IRS in order to escape prosecution.

Bagios' lawyers pressed for his release on the grounds that the government did not grant him a hearing to indict him within 30 days of his arrest. But Judge Rosenbaum declined to release him after a prosecutor said the two sides were in negotiations together.
 
According to the criminal complaint the judge made public, Bagios had helped a California businessman named Bernard Goldstein hide his assets in an account in Panama. Goldstein was also charged and has not entered a plea yet. The complaint also alleges that Bagios met other American taxpayers to discussed their undeclared accounts.

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European flag outside the Commission

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INCIDENT: Towards the end of last year, the European Commission presented its new energy strategy for the next decade, calling for investment of €1 trillion in the EU's energy network, among a series of other measures. Leading Eurocrats hope that an EU energy summit scheduled for next month in Budapest will endorse the proposals and give them some political traction.

SIGNIFICANCE: The new energy strategy is a set of normative proposals that depend upon the member-states, the private sector, and other EU organs such as the European Parliament (EP) for clarification and implementation.

BACKGROUND: The first EU energy "action plan" was formulated in 2006 and was then endorsed in May 2007 by a summit at the level of heads of state and government. That summit called upon the European Commission (EC) to elaborate a new action plan for the decade now beginning. The action plan now expiring has given birth to a number of initiatives, including a series of proposals for liberalization of the energy sector and unbundling electricity production from the provision to consumers, a "climate and energy" package targeting conservation and renewable energy as well as emissions trading, and a "strategic energy technology plan" intended to improve cooperation between the EU and its member-states in research and development of low-carbon technologies.

Last November, the EC presented its proposed "Europe 2020" strategy, based upon feedback from the EU ministers in May to the EC's first suggestions made in March. The EU ministers agreed in May that the new action plan should be ready for summit-level endorsement in a year's time from the presentation of the original draft, i.e., by March 2011. This is the meeting that Hungary, the current president-in-office, intends to be a flagship and showcase for its presidency, which lasts for six months during the first half of the new calendar year. The new action plan's major priority is energy efficiency, although it does not yet establish how to measure improvement. Another priority is to better integrate the all-European energy market, especially the electricity and natural gas markets.

BOTTOM LINE: The EC wishes to make its energy efficiency goals binding upon the member-states while encouraging industry to participate in energy audits. It does not say where the €1 trillion investment that it is calling for will come from. It stresses the role of innovation, but China and the US are already overtaking the EU in wind power and solar markets. The EP's insistence on complete unbundling of electricity production from electricity transmission was not satisfied.

The focus on energy efficiency in particular lacks concrete measures. There is a palpable sentiment in some European political circles in favor of reducing total energy consumption, but these do not directly connect it with the question of how to sustain economic growth, besides suggesting that small and medium enterprises concerned with energy efficiency technologies might flourish. Increasing competition through unbundling is one way the EC sought to address the issue. It had wished to force companies owning both electricity generation and transmission facilities to sell one or the other. A compromise option was then included whereby energy producers could retain their assets but give up management control. Even that was not satisfactory for France and Germany, which successfully insisted that former state monopolies could retain ownership of their energy grids under external supervision. Companies would be able still to govern commercial and investment decisions, but the transmission networks themselves would operate independently.

The priority for improving integration of the energy market builds upon the autumn 2008 EC decision to encourage construction of a "supergrid." This supergrid is intended to allow member-states to share electricity from different sources, from North Sea wind farms to Spanish solar energy to the planned Nabucco gas pipeline from Central Asia through Turkey to Central Europe. The problem is that the supergrid initiative was but the attempt to integrate a collection of national proposals that are not necessarily mutually related. The inability of Brussels to coordinate the inchoate motives of its member-states has for decades been a chronic problem in EU policy implementation. The recent official abandonment of the Trans-European Networks in Energy (TEN-Es) as insufficient to their task is only the latest evidence of that Achilles' heel. (The fate of TENs in transport and in communications appears to be undecided.)

The main lines of the new "Europe 2020" plan are very much like those of the so-called Lisbon Strategy adopted in 2000 to cover the decade just ended. While this suggests a certain degree of continuity, it also indicates a certain failure to realize the earlier-adopted goals. Moreover, the EC seems not to have learned from the fact that the Lisbon Strategy had to be revised because it relied too much on the Brussels center and the member-states, ignoring the European regions, 270 of which are represented in an independent network called the Assembly of European Regions. Indeed, it is difficult to see how energy supply can be decentralized and electricity production multi-sourced without taking into account what the regions have to offer, particularly in terms of innovation. The regions are not only ethnic regions historically existing within current state frontiers but also transborder regions, whose representatives have continually made special contributions to "European construction" over the decades.

Source: http://oilprice.com/Energy/Energy-General/EU-Prepares-to-Approve-€1-Trillion-Master-Energy-Plan.html

By. GIR Analysts for OilPrice.com. For more information on oil prices and other commodity related topics please visit www.oilprice.com

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YUZHNO-SAKHALINSK. At the ceremony marking the...

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SITUATION: In early 2009, Russia inaugurated its first liquefied natural gas (LNG) plant for East Asia at Sakhalin. After ramping up to three times its initial capacity, it will supply roughly 5% of world LNG. It is currently expected that Japan will receive two-thirds of initial exports with the rest going to South Korea and North America.

ANALYSIS:

Sakhalin is a long north-south island in Russia's Far East close to the mainland. Its southern tip is not far from Japan's northernmost point. Hydrocarbon deposits around it are estimated to contain 14 billion barrels of oil and 2.7 trillion cubic meters of natural gas. These are being developed by consortia including such major Western energy companies as Royal Dutch Shell and ExxonMobil. The latter operates the consortium that produces from the first of six planned stages of Sakhalin hydrocarbon development.

The Sakhalin-1 development comprises three deposits. The first is under production, the second is under development, and the third is under exploration.

Oil from the Chaivo deposit started to run through a pipeline to the De-Kastri terminal in Russia's Khabarovsk Krai in September 2006.

Drilling at the Oduptu oil and gas field began in May 2009, and commercial production began in September 2010. The product goes to the Chaivo processing facility and then to the De-Kastri for export.

The Arkutun-Dagi field is yet to be developed, but first oil is expected in 2014; it will also go to De-Kastri via Chaivo.

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Official portrait of United States Secretary o...

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Is the US Government Machiavellian enough to orchestrate the recent brouhaha over the so-called website WikiLeaks, is this a real embarrassment, or will it indeed be damaging as some U.S. diplomats claim?

I am not one to support conspiracy theories but when you stop to analyze the content of the information that was leaked it seem that two things emerge: first, the content of the cables were not so earth shattering as to damage national security, or harm Washington's relations with other countries.

Second, upon further analysis, it would appear that the information revealed instead sends a strong message to America's foes.

Much of what has been released in those cables is hardly news in any real sense of the word. Take for example the report that the US has been spying on its friends as well as on its foes and that Secretary of State Hillary Rodham Clinton ordered diplomats to assemble information on their foreign counterparts. Let's get real. Friends have been spying on friends ever since man has been involved in conflict.

Espionage between nations -- both friendly and less so -- can probably be traced back to the time when the first group of cavemen realized they could use clubs as weapons. All intelligence services will, as a matter of fact, gather information on whoever and whatever they can. This is what intelligent services do. The trick is not to get caught.

Did Israel not spy on the United States, its staunchest ally, and without whom Israel would have a hard time sustaining itself. The most infamous of Americans spying for Israel is a former US Navy civilian, Jonathan Pollard, who passed classified information to Israel. Pollard is now serving a life sentence for treason. While Pollard may have become the focus point of the US-Israeli espionage dossier, other incidents have gone largely unnoticed.

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We have, in the past year, entered an entirely new dynamic in Eastern Mediterranean and South-East European strategic affairs. We are in a period and a region in which Russia, not the West, is taking the key initiatives and has much of the advantage. This is particularly significant given that Russian policymaking receives scant attention in US and other Western media, and remains as opaque to Western analysts as it was during the Cold War era when Russia was veiled by an Iron Curtain. At least during the Cold War, the West threw its best intellects into attempting to understand Russia and the Soviet Union.

Russia's recent major thrusts -- for a variety of historical, economic, and security reasons -- have been to dominate the Caucasus and Northern Tier, the Greater Black Sea Basin, and Central Asia. This has been evidenced particularly by Russia's successful initiatives to build strategic relations with Turkey and Iran. The profound depth of this transformation cannot be under-estimated, and, along with the stability of the European Union itself (which is inextricably bound to Russia for its energy), vitally affects the fate of South-Eastern Europe and the Eastern Mediterranean states.

At the same time that this tectonic shift is occurring, US policy toward the Eastern Mediterranean and adjacent lands has, for the past 60 years -- perhaps longer -- been heavily based on wishful romanticism, ignorance, and an overwhelming and narrow preoccupation with the containment of the now-defunct Union of Soviet Socialist Republics. US policy toward the region continues to be based around a premise of a Soviet threat which no longer exists, but which the US -- and for that matter, some in Britain -- cannot bring themselves to retire or revise. And by continuing to treat post-Cold War Russia as though it was still the Soviet Union, the US and UK have to a large degree caused Moscow to act in manners contrary to Western interests.

The US-led NATO caused alarm in post-Soviet Russia by moving to bring former Soviet bloc states into NATO, by treating Islamist terrorism in the Caucasus as something Moscow deserved while 9/11 was something the US did not deserve, and so on. The poorly-handled attempted deployments of missile defense systems by the US into Poland, the Czech Republic, and Azerbaijan further alienated Moscow, quite apart from the gratuitous refusal to allow Russia to become part of the West; US tacit or active support for Georgian attempts to seize control of Abkhazia and South Ossetia; the US blatant interference in the elections in Georgia, Ukraine, and the Kyrgyz Republic and in creating Kosovo as a supposedly independent state -- with attempts to do the same elsewhere -- were all further examples of perceived post-Cold War US hostility toward Moscow. There are many other examples of events which forced Moscow to return to a lonely course of action in pursuit of securing its own interests in a hostile world.

The high cost to the West of pursuing such a mumpsimus policy -- that is, policy which persists even though the underlying premises have clearly been proven to be erroneous -- is becoming evident as Western economies and Western strategic influence decline. The Western tide is retreating, showing the ground truths, once covered by the sea of wealth and power which had allowed the Cold War fixations to remain unchallenged.

We still see the persistence of Washington-based myths about the Eastern Mediterranean, South-Eastern Europe, and the Caucasus, and those myths have become more expensive to sustain, and more in the nature of comic opera. The result has been that, while the USSR and the threat of ideologically-based East-West confrontation has passed, Russia has been forced to respond by considering the reality that the West would not let the Cold War end. As a result, Russia has had to resume fending for itself in the regions of its immediate neighborhoods, including South-Eastern Europe, the Caucasus and Asia Minor, and the Levant and the associated Eastern Mediterranean. It was forced into accommodations with the People's Republic of China (PRC) over Central Asia, and while some of these were sensible for global trade as a whole, the resulting Shanghai Cooperation Organization (SCO) has emerged in part as a mutual security regime which reinforces the growth of Chinese strategic power as well as the resurrection of some Russian regional hegemonic influence.

The declining strategic influence of the United States -- again, something not recognized in Washington, given that it remains lost in the mists of its own self-importance -- means that the new tensions of South-Eastern Europe, Asia Minor, the Caucasus, and the Eastern Mediterranean have emerged full-blown and there seems little that Washington is prepared to do to accommodate this. The reality is that Western policy toward Turkey and Russia still centers around approaches decided by the British Foreign Office during and after the Crimean campaign which ended in 1856.

At the same time, of course, the French historian, Alexis de Toqueville, also forecast in the first half of the 19th Century that Russia and the United States, as continental powers, must inevitably be rivals and must compete over Europe. So these ancient views of Russia as the perpetual enemy, and Turkey as the inevitable counterbalance to Russia, have shaped British and American strategic sentiments, just as romantic orientalism has shaped Western views of the Middle East and Asia. [Indeed, I would not say that the West should lose sight of the potential for Turkey to be used as a counter-balance to Russia, but this should not be an unthinking, perpetual, and universal policy, when, as in World War I and II, Turkey was not, in fact, always an ally of the West (or an asset to it), whereas Russia and the USSR were, at key times, allies of the West.]

A perspective of the context of actual Western geopolitical and economic interests, and the realities of history, have rarely played a dominant rôle in US or British strategic policymaking since the end of the Cold War. At the same time, Russian strategic policymaking has reverted to the age-old geopolitical and geoeconomic principles which have dominated Russian security for 500 years.

A year ago, however, it became conclusively apparent that Russia had, as a result of Moscow's initiatives and because of the changing global circumstance, become the power with dominance over Turkey. This was the result of trends which had been some time in the making, but my early reporting in March 2009 of that phenomenon -- and the implications it had for Western policy and for Greece and Turkey -- drew no response from the media or from policy officials. To its great credit, the American Hellenic Institute (AHI) took a gamble and published a report of mine in 2009 on the new Russo-Turkish strategic relationship. Only now, a year later, is the West reluctantly coming to grips with the fact that Russia is far more persuasive than the West with regard to Turkey, because Turkey is absolutely strategically in thrall to Moscow.

The same situation applies to Iran. And, indeed, we need to understand that it is impossible to formulate viable policy in Washington with regard to Turkey unless the broad context of Turkish, Russian, Iranian, Chinese, Caucasus, Black Sea, and other dynamics are taken into account. Western analysis is, in fact, guilty of stovepiping and geographic specialization, ignoring the historical and spatial context which drives reality.

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