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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?


To: TobagoJack who wrote (38078)8/8/2008 10:05:43 PM
From: gregor_us  Read Replies (2) | Respond to of 218134
 
Hi TJ. There are lots of moving parts here. If we go back in time, we know that Putin likely has an historical grudge about the BTC pipeline, as it effectively pumps oil out of "his sphere" into the West, while avoiding Russian soil. So it dilutes (though does not break) his iron control over energy supply, to the West. So my concern for Georgia is that Russia would love an excuse to gain more control there. Given that the BTC pipeline carries 850kb/day, I also don't think the West can allow Russia to control the region. What's interesting about strategic pipelines, is that they are proxies for production. In many parts of the world, production takes place with redundant pipelines. But the BTC is crucial. Without it, they shut down some production in the Caspian, as there is no place to store the pumped crude. So the BTC pipeline is effectively part of the oil field.

Sidebar: one of the Saudi mega-projects underway is a new pipeline that can be called upon to divert production to Saudi's West Coast. All these years, much oil production has flowed to the East Coast, through the Abquaiq processing plant. The takeaway here is that Saudi understands that attacks on strategic pipelines shuts you down, if you don't have back-up. Indeed, Abquaiq has already seen at least one foiled plot.

Meanwhile, it appears we are getting some hard data now that USD intervention started several weeks ago, from Central Banks. At least, that's the line James Turk is putting out tonight. So, I suppose the perverse action in oil, where it fell 5 dollars in the wake of losing 850kb/day of world supply can be seen in this light. (115.00 however was one of my correction targets, so, in a way I was glad to see that hit today).

Best.

G