Tuesday, June 05, 2007

Missile shield and oil supplies

The threat by Russian president Vladimir Putin to target Western Europe with nuclear missiles underlines a growing international instability, which increasingly revolves around the availability and supply of energy for the global economy. Putin’s riposte to America’s decision to site interceptor missiles in Poland and the Czech Republic is not surprising. Both these countries were until recently Moscow-controlled buffer states on what was then the border of the Soviet Union. Now they are part of Nato and outposts for the interests of the United States. These interests are primarily about maintaining the flow of oil and gas. Russia holds the world's largest natural gas reserves and the eighth largest oil reserves. Russia is also the world's largest exporter of natural gas, the second largest oil exporter and the third largest energy consumer. In 2005 the oil and gas sector represented around 20% of the country’s GDP, generated more than 60% of its export revenues and accounted for 30% of all foreign direct investment in the country. Significantly, about a third of oil exports are via a pipeline that takes in Poland and the Czech Republic, as well as Germany and Ukraine. Russia is tightening its grip on its resources, taking action against foreign corporations like BP and Shell. Putin has just warned BP that it could soon lose its licence to exploit the massive Kovykta gas field in eastern Siberia, which exports gas to China.

By creating a missile shield located in central Europe, the Bush presidency, supported by the New Labour government, is stoking the fires of a new nuclear arms race. This is aimed at intimidating not just Russia but Iran too, another country with substantial oil reserves. Washington would dearly love to see a non-nationalist, pro-Western leadership in Moscow instead of Putin’s regime, which is tied closely to the oil and gas oligarchs in Russia, and a friendlier government in Tehran. They could then relied upon to supply the United States and its allies with oil and gas at a time when the world’s reserves are reaching, or may have already attained, their peak. Iraq and Afghanistan were the opening shots in the resources wars of 21st century global capitalism. While Iraq has substantial oil reserves, Afghanistan borders several former Central Asian Soviet republics with oil where the United States now has a military presence. The escalating war of words between Moscow and Washington over the missile shield and human rights fits into this picture of emerging international conflicts over oil and other resources in short supply. When the Soviet Union collapsed, and capitalism was restored after an absence of more than 75 years, the world was promised peace and stability. Now that London and other British cities are certain to be included as targets for Russian nuclear missiles once more, the reality is somewhat different.

Paul Feldman, communications editor

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