Streetwise Professor

October 14, 2009

I Am So Surprised

Filed under: Commodities,Economics,Energy,Politics,Russia — The Professor @ 1:43 pm

That Sergei (“The Tarantula”*) Lavrov shot down in flames Hillary Clinton’s attempt to get Russia to agree to tough sanctions on Iran. Actually, I’m not.  I would have only been surprised if Lavrov and Putin had expressed a willingness to do something serious.  I would like to ask, though, that anyone who did fall for Medvedev’s showing a little ankle on this to email me at [email protected].  Have I got some deals for you!

And if anyone is confused on this, consider that Putin has also expressed his deep, deep concern for those oh-so-fragile Iranian psyches, and is recommending that nobody do anything that might scare the poor dears:

Russian Prime Minister Vladimir Putin Wednesday warned major powers against intimidating  Iran and said talk of sanctions against the Islamic Republic over its nuclear program was “premature.”

Putin, who many diplomats, analysts, and Russian citizens believe is still Russia’s paramount leader despite stepping down as president last year, was speaking after U.S. Secretary of State Hillary Clinton visited Moscow for two days of talks.

“There is no need to frighten the Iranians,” Putin told reporters in Beijing after a meeting of the Shanghai Cooperation Organization.

“We need to look for a compromise. If a compromise is not found, and the discussions end in a fiasco, then we will see.”

“And if now, before making any steps (toward holding talks) we start announcing some sanctions, then we won’t be creating favorable conditions for them (talks) to end positively. This is why it is premature to talk about this now.”

Premature, premature, premature.  Manana, manana, manana.  Get the picture, Hillary?  Russia ain’t going to do jack to pressure the Iranians.  Move on to plan B, or C, or whatever one we’re on now.

So just what did we get for the unilateral shafting of the Poles and Czechs?  Just asking.

For an interesting contrast, watch Putin and Russia deal with China. Putin traveled to China to announce big energy deals with great fanfare.  Everything is agreed!  Uhm, except the price.  Details, details.

China has shown no interest whatsoever in agreeing to the same oil-based pricing formula as Gazprom employs in its European sales contracts.  Given the bilateral monopoly condition that would characterize any Gazprom/Russia-China deal, the same sorts of issues that I addressed in my take-or-pay post will make any Russia-China agreement very hard to negotiate and enforce.  So, I wouldn’t hold my breath in expectation of such a deal any time soon.

It is very interesting to note, though, how much more difficult it is for Putin and Russia to deal with China than the Europeans.  The old standby divide-and-conquer gambits that routinely work with the Euros are not an option in dealing with China.  Putin doesn’t look quite so smart or powerful in dealing with a single, hardheaded negotiating partner as he does in rolling divided, squabbling, and politically vulnerable Europeans.  If the Euros were smart they would watch, learn, and imitate.  Note that this is a conditional statement, not a prediction.  I doubt that they will.

Roman Kupchinsky at Jamestown notes that the Chinese are also quite concerned about the Russian ability to deliver on all the blank gas checks they’ve written–a point I’ve made repeatedly on SWP:

[T]he main concern analysts have is Russia’s ability to supply 68 bcm of gas per year to China while meeting long-term commitments to European customers as well as rapidly increasing Russian domestic demand for gas.

Earlier this year, Gazprom announced that gas from the Sakhalin-1 project will not be sold to China, but diverted instead to the gas hungry Russian Far East region of Vladivostok.  Gazprom is holding talks with Exxon about buying all of its gas output from Sakhalin and industry sources say the company is offering prices equal to Russia’s domestic gas prices – which are far below world prices. Exxon said it is studying all options to sell gas from Sakhalin-1.

In addition to making promises to supply China, Gazprom has also stated that it wants to capture  10 percent of the U.S. gas market within the next 5 years by selling some 66 bcm of gas in the form of LNG. The plan envisions that Sakhalin-2 will supply the bulk of this LNG.

The bottom line is whether Russia is capable of building such costly pipelines as Nord Stream, South Stream and a second string of Blue Stream; while at the same developing the Yamal peninsula into a major gas producing center and finishing the Shtokman project? These projects, and others too numerous to mention, are projected to cost hundreds of billions of dollars which Russia does not have and which Western companies might not want to spend given the shaky business reputation of Gazprom and its management.

Exactly.  The Chinese presumably extracted something from Putin in exchange for letting him put on this Potemkin/Putinkin-goes-gas display.  But China will almost certainly not rely in a serious way on Russian promises of future energy supplies, because it understands that Russia’s ability to perform on its commitments is so doubtful.  If it does enter into agreements with Russia, it will likely impose contractual terms that will shift the major risk of non-performance due to the inability to obtain the necessary supplies to the Europeans.  Yet more reason for the Euros to get their act together.

* I am counting the seconds until the eruption of howls of protest from Cutie Pie at this arachnomorphism.

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27 Comments »

  1. “There is no need to frighten the Iranians,” Putin told reporters in Beijing after a meeting of the Shanghai Cooperation Organization.

    “We need to look for a compromise. If a compromise is not found, and the discussions end in a fiasco, then we will see.”

    “And if now, before making any steps (toward holding talks) we start announcing some sanctions, then we won’t be creating favorable conditions for them (talks) to end positively. This is why it is premature to talk about this now.”

    In other words, looking at it from outside the lenses of Western supremacism (i.e. objectively), Putin deserves a Peace Prize even more than Obama.

    Comment by poluchi fashist granatu — October 14, 2009 @ 2:59 pm

  2. Obama is becoming Jimmy Carter faster than Jimmy Carter became Jimmy Carter. Maybe if the Empty Suit had read Mark Bowden’s “Guests of the Ayatollah”, it came out in 2003 as a reminder of those events, he might have gleaned some insights into just how stupid it is to model foreign policy after Jimmy who never met a thug he couldn’t accomodate and who was trounced by every thug he accomodated.

    No one games the Chinese for every long. China simply has to patiently stick with their disciplined long term time horizon and be consistent on what they won’t tolerate from the capricious Kremlin mafia because they will own large swaths of Russian minerals and oil as a given in a generation or two.

    Comment by penny — October 14, 2009 @ 5:39 pm

  3. The US has never reciprocated on concessions, so what’s the big surprise? Anyway, a bonfire in Iran would suit many just fine. They probably dropped their guard last week, so bomb, bomb, bomb Iran!

    Comment by So? — October 14, 2009 @ 7:09 pm

  4. Hey,So?,or whichever established Pootie troll moniker here you are recycling, Iran is planning the “bonfire” as per their own 24/7 news cycles of state sponsored threats to Israel. Perhaps you failed to notice that detail. Or perhaps the lapse is one of convenience.

    So, Iran is high on your list of moral authority regimes. Sweet. But, then perhaps you didn’t notice their vicious homicidal behavior towards the tens of thousands of their citizens on the streets or their appalling treatment of gays and women. Sweet. No offense if I and probably any decent person reading your creepy garbage relegates you to a trash bin where sociopaths belong.

    Comment by penny — October 14, 2009 @ 8:13 pm

  5. Unless someone gifts them the bomb, they won’t have one. Either way, I don’t care. Bombs away. Publically, I’ll be indignant of course.

    Comment by So? — October 14, 2009 @ 8:32 pm

  6. I’m not So?

    That said, (s)he makes excellent points. You condemn Iran on Western-invented concepts like “human rights”, which makes you essentially a Western supremacist / cultural imperialist. In reality the West is just one culture amongst many and there is no objective way to ever find out which culture is “superior”, because each culture defines superiority in its own way, so there is no valid ground for criticism as to how Iran chooses to exercise its sovereignty within its own borders.

    Furthermore, unlike the West, Iran is not responsible for slavery, the genocide of “primitive” peoples throughout the world, colonialism, imperialism, and its latest manifestation – global cultural imperialism, which involves the most stunning hypocrisy. So in fact it’s quite possible that Iran really is a greater moral authority than the West (though the term is in any case hard to objectively define and moreover can only ever be relative).

    Comment by poluchi fashist granatu — October 15, 2009 @ 2:52 am

  7. The neo-Stalinist Capo ( poluchi fashist granatu )have a very interesting defence of Iran’s Criminal Regime .
    The Psychological Profile of the of the Putin -mafias head decapitators is very similar ,al-Zawahiri was indeed being trained by the FSB.

    http://en.wikipedia.org/wiki/Ayman_al-Zawahiri#Expulsion_from_Sudan_and_time_spent_in_Russia

    Furthermore, unlike the stalinist poluchi fashist granatu Imperial Russia , Iran is not responsible for slavery, the genocide of “primitive” peoples throughout the world, colonialism, imperialism, and its latest manifestation – global cultural imperialism, which involves the most stunning hypocrisy. So in fact it’s quite possible that Iran really is a greater moral authority than the Putin-Mafia (though the term is in any case hard to objectively define and moreover can only ever be relative).

    http://en.wikipedia.org/wiki/Treaty_of_Gulistan

    http://en.wikipedia.org/wiki/Treaty_of_Turkmenchay#Massacre_at_the_Russian_Embassy

    Massacre at the Russian Embassy

    In the aftermath of the war and signing of the treaty, anti-Russian sentiment in Persia was rampant. On February 11, 1829, an angry mob stormed the Russian embassy in Tehran and slaughtered almost everyone inside. Among those killed in the massacre was a newly appointed ambassador to Persia Alexander Griboyedov, the celebrated Russian playwright and personal friend of Alexander Pushkin. (Griboyedov had previously played an active role in negotiating the terms of the treaty)

    Comment by Oleg — October 15, 2009 @ 6:42 am

  8. What I am very curious to see is some kind of move from Tehran that forces Moscow’s hand. The opposition marchers are already shouting “Death to Russia” as the new “Death to America,” and I’m sure that even Ahmadinejad’s circle is well aware that the Russians are screwing them around. There’s a lot of whispered promises going on behind closed doors, which are not being met (That’s your manana, manana, manana line there – goes both ways).

    The Kremlin has been very successful in running this status quo despite so many changes in the political dynamic since the Obama inauguration. How much longer can they keep it up? If forced to commit to a real policy instead of the doublespeak, which one will it be?

    Comment by James — October 15, 2009 @ 7:02 am

  9. Mohamed Atta was trained in the US.

    Comment by So? — October 15, 2009 @ 7:47 pm

  10. So?, please, Mohamed Atta simply took a flight course in the US which was open to anyone whose visa status was ok at the time, not an unusual situtation in a free and open society. He got his college degree in Germany, so what. Tens of thousands of foreigners attend schools in the US, so what again.

    Your point is exactly what? That’s the best you can serve up? Get real.

    Comment by penny — October 16, 2009 @ 12:07 am

  11. […] not forget the foibles of Sechin’s incomprehensible oil deal with the Chinese).  Streetwise Professor has an interesting post breaking down the negotiating points which makes China a pretty tough gas customer: For an […]

    Pingback by Official Russia | China Drives a Hard Energy Bargain on Russia — October 16, 2009 @ 1:07 am

  12. My point is that #7’s first point is pointless.

    Comment by So? — October 16, 2009 @ 3:09 am

  13. My point is that #11’s point is pointless.

    The Sublime Object of ” al-Zawahiris” Ideology you can get from the Russian mafia organization called FSB/KGB .

    Widespread emigration in the 1990s allowed Russian criminal organizations to spread themselves further around the world. Prior to the collapse of communism some limited numbers of Russian Jews were allowed to emigrate from the Soviet Union if they could prove they had Jewish descent, and criminals took advantage of this if they were themselves Jewish, acquiring Jewish identity papers to be granted the permission to leave the country that had been granted by Mikhail Gorbachev in the late 1980s.

    Linking key psychoanalytical and philosophical concepts to social phenomena such as totalitarianism and racism, an You understand the political significance .

    Mohamed Atta was an ideological by-product of the collaps of the communist illusion .
    The Russian mafia organization called FSB/KGB new modernizing and subcontracting a service to brainwashed idiots.
    “same shit, new wrapping”

    Comment by Oleg — October 16, 2009 @ 5:37 am

  14. “So just what did we get for the unilateral shafting of the Poles and Czechs?”

    The Czech/Polish people were never sold on the idea of US missile defenses to begin with, so exactly who are you talking about as being shafted here? A few russophobe Czech/Polish politicians? Heh. Boo hoo for them.

    Comment by rkka — October 16, 2009 @ 9:19 am

  15. The Czech/Polish-fobic FSB-mafia have a lot to worry about ,Heh. Boo hoo for them.

    The decision definitely does not mean that the United States or Nato will leave Eastern Europe to a “Russian zone of influence”. There be replacement in form of Patriot-missiles or even more Nato-troops.

    http://www.google.com/hostednews/afp/article/ALeqM5i5EYd_OBl7i4fgW8uggewyVZWW0A

    WARSAW — The United States will deploy ground-to-air Patriot missiles in Poland in 2010 and is discussing its plans for a new anti-missile system with Warsaw, a US defence official said Friday.

    Comment by Oleg — October 16, 2009 @ 11:28 am

  16. Except, rkka, after Russia invaded Georgia Polish popular support doubled.

    http://www.cnsnews.com/news/article/34261

    As Putin continues to bully and threaten his neighbors public sentiment can turn on a dime like it did on Poland. Nothing is etched in cement, well, except cemented shut brained sovoks and Pootie’s little fascist ultra-nationalists sycophants.

    Comment by penny — October 16, 2009 @ 11:38 am

  17. I’d like to release a howl of protest at SWP comparing the Russian foreign minister to a spider.

    This is simply too much. Cruelty of this kind cannot be tolerated in civilized discourse.

    SWP!Shame on you! Leave the poor spiders alone!

    Spiders control the pest population and make pretty webs with amazing technical properties. What did they ever do to you, that you need to compare them to a useless and indeed malignant bacteria like the foreign minister?

    Repent!

    Comment by La Russophobe — October 16, 2009 @ 11:41 am

  18. I’ve dropped in just for a minute to see what is going on here.
    I just wanted to say that Russians are smart.
    They demand more transparency in American anti-missile plans, while never disclosing their own plans.
    In their opinion, Americans are plain idiots.
    Then again, with this administration, you never know.

    Comment by Michael Vilkin — October 16, 2009 @ 2:19 pm

  19. La Russophobochka does Lavrov honor by comparing him to a bacteria, surely the most useful life form of all for without them we are all dead. Though, that would be a good thing considering endless human sins against God’s creation (environmental destruction, anthropogenic global warming). What gives us the right to consider homo sapiens superior to any other species? Yet we exterminate thousands every day.

    Comment by poluchi fashist granatu — October 16, 2009 @ 7:35 pm

  20. poluchi fashist granatu aka Sublime Oblivion and all of your other monikers, spare use your anti-biotic rant. Bacteria don’t get a moral equivalence to sick children pass. Lister added more value to mankind than any of your beloved homicidal Communist hacks.

    And, please don’t take this personally, but, crack eats IQ points. Just in case you know someone with that problem, mind you.

    Comment by penny — October 16, 2009 @ 10:44 pm

  21. Ooops, better phrased as “anti antibiotic rant”.

    Comment by penny — October 16, 2009 @ 10:54 pm

  22. Oleg:
    the truthers’ nonsense is more credible.
    penny:
    save the bears, sell your bile.

    Comment by So? — October 17, 2009 @ 1:42 am

  23. Thankfully antibiotic resistance is growing, hopefully putting an end to humanity’s interference with nature on the microbial scale.

    My only monikers are DR, S/O, pfg, and pfyb. It’s pretty clear that it’s the same person and I’ve never tried to conceal that. Your buddy LR is the real master of sock puppetry.

    PS. Tell LR to check the Technorati ratings for “Sublime Oblivion” and “La Russophobe”. She will be unpleasantly surprised, especially considering the amount of time and effort she spent trying to “prove” her e-influence.

    Comment by poluchi fashist granatu — October 17, 2009 @ 5:42 am

  24. So? -poluchi fashist granatu

    The Neo-Stalinist nonsense is more credible.

    Defense Minister of the Republic of South Ossetia Lieutenant-General Jury Tanaev showed officers and students of the Military academy of the General Staff of the Armed Forces of Abkhazia that the states which launch wars will be punished sooner or later. Officers and students of the Military academy of the General Staff of the Armed Forces of the Republic of Abkhazia listened to the lectures of the Defense Minister of South Ossetia with great interest”, the Abkhaz TV reports.

    I bet they did. It must have been quite a revelation in all its profound philosophical and ironical depth.

    (Lifted from the Official Site of Abkhazian President Bagapsh)

    Comment by Oleg — October 17, 2009 @ 6:14 am

  25. “Except, rkka, after Russia invaded Georgia Polish popular support doubled.”

    Polls fluctuate. Where was it this past summer, for instance?

    Comment by rkka — October 17, 2009 @ 2:05 pm

  26. poluchi fashist granatu aka DR, S/O and pfyb, please, I don’t work for the post office, if you have message for LR deliver it yourself.

    “Thankfully antibiotic resistance is growing, hopefully putting an end to humanity’s interference with nature on the microbial scale.”

    OK. Fair enough. Thwarting germs is disrespectful. Check. Listen, put the bong, crack pipe? down, seriously, it’s robbing you of a multi-cellular identity.

    Comment by penny — October 17, 2009 @ 5:43 pm

  27. […] about Putin as of 02/11/2009 I Am So Surprised – streetwiseprofessor.com 10/14/2009 That Sergei (”The Tarantula”*) Lavrov shot down in flames […]

    Pingback by Ладушки.Net » Blog Archive » Posts about Putin as of 02/11/2009 — November 2, 2009 @ 2:19 am

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