05 June 2014

God created Crimea to train the faithful

I've been re-reading Dune for the first time in 20 years.  Mostly for parenting tips - I'm hoping to raise a Fremen daughter.

It suddenly occurred to me "this whole book is an allegory, for middle eastern politics in the 1960s.  The Spice is standing in for oil, the Harkonnens are the Soviets, the Atreides are the US and Arrakis is the entire middle east".

Why had no-one else seen this?   

Turns out, I was literally the last person on Earth to achieve this insight.

Anyway, the point I'm trying to make is as true today as in 1965 - the Spice (oil) must flow.  If you examine recent frank discussions between Russia and the US (or Gazprom and Exxon if you prefer) in respect of Ukraine, you can go a fair way to explaining them through the lens of oil rights.

The Russians moved with extreme haste to recognize Crimea's vote for independence and annex it into the old motherland, but balked at doing the same for vast stretches of eastern Ukraine despite a very similar vote.  

I wondered why.  On paper, both would be worthy additions to the Rodina. 

Crimea is located right in the middle of the Black Sea. European powers have fought for the last dozen generations to control the port of Sevastopol.  Its hard to overstate its strategic importance.

On the other hand, Eastern Ukraine contains most of the coal and ferrous ore deposits in the country and the largest part of its heavy industry. The annual steel output is measured in tens of millions of tonnes. Its also the path for the massive LNG pipeline which feeds Siberian product into the western European network.
So, I was mildly surprised that the Russians went hell for leather to grab Crimea but seem content to leave everything east of Dnepropetrovsk in the hands of the Ukrainians. 

But if you define your geo-political interests purely on the basis of crude oil, the anomaly resolves.  

Crimea might not have any oil, but its exclusive economic zone stretches out up to 200 miles across the Black Sea.  And that sea is black with oil.  No-one seems to know how much, but enough to pique the interests of ExxonMobil, Royal Dutch Shell and Petrom.  So lets assume a very large amount.

In contrast, the mineral riches of the east don't contain much oil and, while the LNG might go through the eastern part of the country, the big oil pipe doesn't, it goes into Ukraine from Belarus west of Kiev.

So taking the east doesn't improve Russia's grip on the oil supply.

Whatever the value of the onshore assets in Eastern Ukraine, it could never hope to match the offshore treasure around Crimea.  

The spice must flow and the Russians decided it would flow east not west.

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