Tuesday, January 09, 2007

It's the oil, Stupid!

About one year after the last big dispute that terrified Europe, the Russian bear shows its teeth again. The current victim is little brother Belarus.

It all began last year, when the Russian state-controlled Gazprom announced that Belarus was to pay "market prices" for the gas it imports from Russia. Tough negotiations started - with both sides threatening to stop the transit of gas from Russia to the EU - a compromise was reached just in time.

But that was not all. Yesterday Russia stopped the export of oil to the West based on allegations that Belarus was illegally keeping some oil itself. Russia did so without informing its European buyers, who were not amused.

In Soviet times and roughly the first decade after the break-up, Russia was not overcharging its neighbours. Since the beginning of 2006 we know that Russia uses the height of energy prices for geo-strategic purposes. Infamous defectors to the West, such as Georgia and Ukraine, were the first ones to bleed over this issue. But what did Belarus do wrong to lose the favour of Russia?

In the eyes of the West, Belarus president Lukashenko is Europe's last dictator, a title he earned right after the fall of Milošević in Serbia. But what is wrong from the Russian point of view? Both countries even constitute a Union together. The treaty was signed 10 years ago, but the coming into force goes very slowly. Both parties are complaining that the creation of that state is overdue. And turning it around: what is a Union State worth if the constituents cannot even reach an agreement on energy?

And what about the people? Well, luckily it will not freeze this week in Belarus. The forecast for this week (+5 degrees C) lies more than 10 degrees above the climate average of -7. And otherwise they can always order nice and warm corporate slippers in Moscow. Like the fancy Gazprom ones to the left.

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