It Again Comes Down To Oil

It again comes down to oil

http://www.indianexpress.com/story/347104.html

Associated Press
Posted online: Monday, August 11, 2008 at 0038 hrs Print Email

WASHINGTON, August 10: There is more than meets the eye to the frantic US efforts Friday to talk Russia and US ally Georgia out of war over an obscure mountain tract most Americans have never heard of.

Georgia sits in a tough neighborhood, shoulder to shoulder with huge Russia, not far from Iran, and astride one of the most important crossroads for the emerging wealth of the rich Caspian Sea region. A US-backed oil pipeline runs through Georgia, allowing the West to reduce its reliance on Middle Eastern oil while bypassing Russia and Iran.

The dispute makes the Bush administration the middleman between a promising ally it wants to help and the powerful former adversary next door whose help it needs.

Washington praises democratic development in Georgia, delights in its contribution of combat troops for Iraq and acknowledges valuable intelligence and counterterrorism cooperation. Moscow’s cooperation is vital to numerous Washington aims in Iran, North Korea and elsewhere.

The pipeline that crosses Georgia can pump slightly more than 1 million barrels of crude oil a day, or more than 1 per cent of the world’s daily output. The 1,770-km pipeline carries oil from Azerbaijan’s Caspian Sea fields, estimated to hold the world’s third-largest reserves. Its potential vulnerability was already in the spotlight after it was sabotaged this week, apparently by Kurdish separatists.

Most of the oil is bound for Western Europe, where gas prices are even higher than the $4 and more a gallon that US consumers are now paying. With only so much oil to go around, what the pipeline carries affects prices elsewhere. The United States also hopes it will be a model for other development projects that could have a more direct effect on the US market.

At the Pentagon, a senior defense official said Georgian authorities have asked the United States for help getting its approximately 2,000 troops out of Iraq. The request is apparently related to the fighting in South Ossetia.