Russia does not listen to America on oil pipeline locations

For a decade Washington has been backing the Turkish and Azerbaijan governments to steer the export of Caspian region crude oil away from Russia. Russia’s newest riposte has been to ally the Russian and Iranian oil industries, and open up the shortest, cheapest, and most lucrative oil route of all, southwards out of the Caspian to Iran.

Putin to the oil pump
John Helmer
‘23-AUG-04 19:15′

MOSCOW (Mineweb.com) — For a decade Washington has been backing the Turkish and Azerbaijan governments to steer the export of Caspian region crude oil away from Russia. Russia’s newest riposte has been to ally the Russian and Iranian oil industries, and open up the shortest, cheapest, and most lucrative oil route of all, southwards out of the Caspian to Iran.

The economics of the southward route are the latest blow for the Bush Administration, as it tries to redraw the geography of the Caucasus on an anti-Russian map. But for oil exporters and shippers in the Caspian, President George Bush’s jawboning looks to be as futile as King Canute telling the sea to roll backwards.

Early oil from Azerbaijan’s newest offshore oilfields has been piped northwestwards through the Russian pipeline system to Novorossiysk port, on the Black Sea, along with crude from the Caspian shoreline of Kazakhstan. But there have been frequent arguments with the Azeris over volumes and transit fees, and these have led to frequent oil stoppages. Azeri oil for transit across Georgia to Supsa port is a costly trickle, by comparison.

Bosphorus chokepoint, Bosphorus Bypass

In parallel, Turkey has been steadily tightening restrictions on tanker movement out of the Black Sea, through the Bosphorus Straits. The latest rules ban lengthy and large-capacity tankers — those which are most cost-effective for charterers and cargo-owners — from moving through the straits at night. The delay adds to the transport charges, creating an expensive chokepoint that has multiplied the costs of routing oil through the Black Sea for US allies, and Russia, alike.

As new Caspian oilfields come onstream, and the volumes of crude lifted grow beyond the capacities of the Russian pipeline system to absorb, the American strategy has been to press hard to redirect these exports across land towards Turkey. The pipeline route chosen is known by its origin and destination as Baku-Ceyhan.

The Russian government has always understood that the this pipeline was part of the broader US strategy to cut all links with Moscow of the former Soviet states in the Caucasus, building new economic infrastructure that would dissuade the Caucasus group from ever renewing these ties. These efforts have proved to be a costly boomerang.

To thwart those in Turkey, who view the Bosphorus logjam as leverage to promote the Ceyhan route, Russia