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"Energy Dialogue" Reduces U.S. Dependency on Mideast
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| New
energy agreement could mean putting psychological pressure on
Middle East suppliers
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MOSCOW,
May 24 (IslamOnline & News Agencies) – In an attempt to reduce
U.S. dependency on Middle East oil supplies, as well as to give a
major boost to the Russian economy, Russian and U.S. presidents
Vladimir Putin and George W. Bush agreed Friday, May 24, to launch a
"new energy dialogue".
"World
economic growth depends on the stability and reliability of energy
supplies," Agence France-Presse (AFP) reported the two presidents
as saying in a joint statement.
The
statement said Russia is "one of the biggest world energy
suppliers, and in order to increase international energy security and
[market] stability, we have agreed to launch a bilateral energy
dialogue."
Apparently,
such agreement could be beneficial for both sides. Enhanced
Russia-U.S. cooperation in the energy sector would reduce U.S.
dependency on the volatile Middle East and the major OPEC
(Organization of Petroleum Exporting Countries) suppliers and have a
stabilizing effect on world prices.
Concerning
Russia, already the world's second largest supplier of crude after
Saudi Arabia, it would regain some of the market share it lost with
the collapse of the Soviet Union and receive a major boost to its
economy, AFP said.
"Russia
produces excess oil and the United States needs it. Longer-term
understanding over oil delivery would be an elegant way of undermining
OPEC, limiting oil price stability and providing stability to the
Russian budget," said Roland Nash of the Renaissance Capital
investment group.
According
to AFP, the statement envisages increased U.S. investment in oil and
gas prospection and extraction in Western Siberia and in Russia's Far
East and Pacific coast regions, along with modernization of Russia's
refining and transportation structures.
However,
observers said the agreement was unlikely to give rise to an immediate
surge of Russian oil on the U.S. market. Russian oil exports to the
United States currently account for just 0.2 percent of the market,
compared with 20 percent for Saudi Arabia and 14 percent for
Venezuela.
Considerable
time will be necessary to develop supply routes and modernize Russian
ports, AFP said.
The
construction of new pipelines would lead to a sharp rise in U.S.
investment in the Russian oil industry and enable it to regain the
levels it achieved during the Soviet era.
U.S.
investment in the Russian energy sector has been modest, hamstrung in
part by restrictions arising from the Trade Department's refusal so
far to grant Russia recognition as a market economy and by the
Jackson-Vanik amendment that also denies it favorable trade terms.
Movement
to ease these restrictions was apparent at the Moscow summit where
Bush said he would urge the U.S. Congress to remove Russia from the
Jackson-Vanik amendment, an item of Cold War legislation designed to
punish the Soviet Union for limiting the emigration of Soviet Jews,
AFP said.
Valery
Nesterov, of the Troika Dialog group, said the oil agreement is a
means of putting "psychological pressure on Middle East
suppliers."
Meanwhile,
Putin hopes the summit will also have a tangible economic payoff, as
he is looking to Bush to accelerate U.S. help to Russia gaining the
status of a free-market economy, entitling it to U.S. trade benefits a
decade after the collaspe of the Soviet Union.
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