given that russia just, in effect, threatened to invade the ukraines, and is helping with iranian nuke power while other bits of know-how we can guess are coming from more easterly nations, the whole geo-political complexion is changing, and rather fast.
and given the lesson of iraq, iran would be astute to work on some technological insurance regardless of regime in place
given the almost given eventual usa pullout of iraq without genuine stablization, israel may be exposed to a newly re-focused force in the region, either before or after such a force focuses on saudi arabia
such a usa pullout will certainly hand iraq over to iran, unless of course usa finds former sunni leaders not guilty and put them back in power
so, israel, a small country in terms of both population and size, existing amidst neighbors hostile or ambivalent, may have to choose the least bad of all bad approaches, or actually start making genuine friends in the region ... paraphrasing an old saying, 'friends come and go, but enemies are like diamonds, forever'
in any case, all interesting to watch and brief on
but perhaps buy some gold, as its price rise at some point will no longer be explained away by invoking hedge funds, inflation, ad such, but indicate true and present emergencies, without fail, as in throughout all of history
anyhow, some read from tainted stratfor, interesting never the less
Geopolitical Diary: Wednesday, Dec. 28, 2005
A crisis has emerged in Russo-Ukrainian relations. Russia has supplied Ukraine with natural gas at below market prices since the breakup of the Soviet Union. The Russians have intended -- and have publicly stated -- that they will begin charging Ukrainians market prices for that gas beginning in 2006. Ukrainians, facing a quadrupling of natural gas prices, have now said they had a different understanding of the agreement.
First, it was their understanding that the increases would be phased in over time. Second -- and this is the explosive part -- the Ukrainians are claiming that they have the right to charge 15 percent of the price of natural gas sold to Western Europe that transits through Ukrainian territory. Since more than 80 percent of Russian natural gas production is exported via pipelines running through Ukraine -- and shifting this flow would be extraordinarily difficult, if not impossible -- the Ukrainian claim to a 15 percent transit royalty represents a serious economic challenge to Russia. At the same time, it does not solve Ukraine's problem of an immediate, massive increase in prices. Ukraine is in trouble even if it gets the 15 percent royalty.
But Russia is not prepared to give on that. A Gazprom statement summed up the Russian view: "This irresponsible and legally ignorant announcement is aimed at escalating tension in Russian-Ukrainian relations, and undermines Europe's trust in Ukraine as a transit country." A Gazprom official added that "all of Ukraine's actions on siphoning off gas after Jan. 1, 2006, will be regarded as ... theft," in a statement to The British Broadcasting Corp. Russia's energy minister said the matter would not be discussed further, setting the stage for a round of discussions Dec. 28.
Ukraine, looking for some leverage, has raised the question of Russia's continued use of Ukrainian Black Sea port facilities for its fleet and even of withdrawing Ukraine from the Commonwealth of Independent States. These threats have been floated very publicly, and it is hardly surprising that the Russians have reacted by going ballistic -- and have done so quite officially. Responding to the port threat, Russian Defense Minister Sergei Ivanov said, "The agreement on the Black Sea fleet base is on part of a bilateral treaty, the second part of which contains recognition of mutual borders. Trying to revise the treaty would be fatal."
If we understand Ivanov's statement clearly, he used the word "fatal," which is never a good word. He used it this way: There is a treaty with Ukraine that says Russia would respect Ukraine's territory and Russia would get bases on the Black Sea. If the Ukrainians do not respect Russia's rights under that treaty, Russia will not respect its obligations under the treaty, either. Unless we are dense, Ivanov just threatened to invade Ukraine if Kiev brought the bases question to the table.
That means the Ukrainians will not try that lever in the Dec. 28 talks. The only lever this leaves them is to cut off Russian access to its gas markets by stopping the transit of natural gas across Ukraine. The problem with this strategy is that it is suicidal for Ukraine, too, since Ukraine gets all of its natural gas from Russia. Now maybe the Ukrainians want to play economic chicken with the Russians, but the invasion word has been used, and the Russians are out of patience with the Ukrainians. Which means that while the Russians may give a bit on the phase-in of higher prices, that is about all that is on the table. And it is not even clear that the Russians will yield on that point.
The Ukrainians had their "Orange Revolution," contrary to Russian wishes. The Russians want to reverse it. The Ukrainians are now undoubtedly talking frantically with their friends in Washington, asking them to lean on the Russians or to provide alternative sources of energy. Washington does not have much to lean on Moscow with, and is in no position to replace Russian natural gas. So, apart from a serious diplomatic note and a few more consultants from Harvard on constitutional reform, Washington has little to offer.
Russia, on the other hand, has been reasserting itself throughout its near abroad. Ukraine is critical to Russian national security, and Ukraine has a heavy economic dependency on Russia. The rules of geopolitics are not readily reversed by even the most heartily felt rhetoric, and Russia holds the cards in this game. The outcome -- that Ukraine will be part of Moscow's sphere of influence -- is hardwired into the system. The question is how fast the Russians will drive. The answers could begin to emerge after the Jan. 1 deadline for start of the Ukrainian "theft," a mere four days away.
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