Sunday, January 02, 2011

Russia and China's New Oil Pipeline, harbinger of the rising importance of Inner Asia

If any development indicates how the world is changing, it is the news that the world's largest producer of oil -- Russia, not Saudi Arabia -- and the world's largest consumer of oil -- China, not the United States -- have been linking up ever more closely. Russia has been shipping oil to China for years, but now a new pipeline has opened linking the two countries ever more closely. The pipeline will pump 300,000 barrels of oil a day into China. And of course we can expect more deals to bring China ever more closely into the energy rich lands of Central Asia.

I keep wondering what Russia's strategic location will mean for the world over the long term. The world's largest oil producer lies strategically situated between the EU on the west, a major consumer of oil in the modern world, and China on the east, the world's largest consumer of oil -- and one that is demanding ever more of it as its economy grows. Whatever we think of Russia, ever more clearly a mafia-state, it has powerful advantages even if the capitalistic world is terrified of its mob-style tactics of governance.

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