Russia raises the stakes

I have some initial thoughts at Newshoggers on how the Russia/Georgia situation is changing the balance of world power. The way I see it, our impotence has just been laid bare by The Big Bear, for all the world to see. At the root of our diminished ability to respond, of course, is our continued occupation of Iraq, which we all know was always largely about control of the oil.

How ironic then, that Russia just raised the ante on control of world oil without barely lifting a finger. Business Week explains.

The sudden war in the Caucasus brought Georgia to heel, reasserted Russia's claim as the dominant force in the region, and dealt a blow to U.S. prestige. But in this part of the world, diplomacy and war are about oil and gas as much as they are about hegemony and the tragic loss of human life. Victory in Georgia now gives Russia the edge in the struggle over access to the Caspian's 35 billion barrels of oil and trillions of cubic feet of gas. The probable losers: the U.S. and those Western oil companies that have bet heavily on the Caspian as one of the few regions where they could still operate with relative freedom.

At the core of the struggle is a vast network of actual and planned pipelines for shipping Caspian Sea oil to the world market from countries that were once part of the Soviet empire. American policymakers working with a BP-led consortium had already helped build oil and natural gas pipelines across Georgia to the Turkish coast. Next on the drawing board: another pipeline through Georgia to carry natural gas from the eastern shore of the Caspian Sea to Austria—offering an alternate supply to Western Europe, which now depends on Russia for a third of its energy.

Unlike the neocons here, it appears Russia learned its lesson from ill fated blunders into unwinnable guerrilla conflicts. With one small, relatively inexpensive strike, suddenly they're holding all the aces. If it wasn't so deadly serious, it would be funny.