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Petropolitics at heart of Russia-Georgia clash

Oil-pipeline routes, market leverage make struggle a 'battle for energy.'

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In both geopolitical and economic terms, the United States appears a loser in the Russia-Georgia conflict.

If the pipeline crossing Georgia, bringing approximately a million barrels of Caspian oil a day to the West, remains shut down for much longer, it could result in higher oil prices.

"We could see $4 a gallon gasoline again," warns Edward Yardeni, an American consulting economist.

The 1,100-mile Baku-Tbilisi-Ceyhan (BTC) pipeline provides only about 1 percent of the global demand for oil. But, as Prof. Michael Klare of Amherst College notes: "There's not a lot of spare [crude oil] capacity" in the world.

In the long-running struggle for control of Caspian oil and gas and influence in the ex-Soviet states of that region, the clash has been a blow to US clout.

"The Russians come out of this as winning this round," says Professor Klare. "They are the power brokers in this part of the world…. But there will be more skirmishes to come."

Klare, author of "Rising Powers, Shrinking Planet: The New Geopolitics of Energy," sees the conflict as "not a battle for democracy," as portrayed by Washington. "It was a battle for energy," he says.


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