OIL AND POLITICS

Oil the black gold of the world today stands at a crucial juncture. No I am not going to blabber about the emptying or the replenishment of the same. But I would like to state its importance in world politics today. For example today just recently Russia had hit a big oil reserve round about the Siberian region. It is more popularly known as the Sakhalin project. Of course it has on its own lead to much controversy. First of all Vladimir Putin’s bold decision to state that Russia would not let anyone have its piece of cake no matter what. That Russia’s in mood to enter into a trade agreement with any of the states. But one thing that Russia forgets here is that for refining the crude oil it has its centers in China, Japan and other such countries. However with Russians planning to get into the Refining business it would be costly decision that Russia has to take, because of the capital intensive market that oil sector currently is.

Coming to India with its nuclear agreement on the right path its time the government took some measures to get into oil sector and sort out the long standing controversy of oil with its neighboring states. First of all India comes after China in terms of oil consumption. Its the sixth largest consumer of oil all over the world.Still India has grave problems regarding this sector which is leading to huge economic losses. First of all the long standing pipeline from Yemen and Turkmenistan which if laid will go a long way in resolving India’s major chunk of problems. But India’s not so good relation with Pakistan leads to a failure of laying the pipelines from Afghan till India through Pakistan. Even though India is ready to pay something around $500 mn in transit fees Pakistan cannot guarantee the transit of the pipelines. The other option that India has is to go around the Pakistani state from the Arabian Sea and enter into India. But that too is a costly affair, which would require huge capital investments which at present would not be feasible.

On the left of India lies the oil rich Burma, but that too being China friendly doesn’t do the situation any good. Even if they do agree there is a problem of Bangladesh flexing its muscles to stop India from getting the crude? Even though an agreement of $125 mn been offered as transit fees were made as an offer, Bangladesh is keener on being China friendly. China on he other hand is on its way to creating a string of pearls all alon from Nepal to Pakistan and back to china.This would be major blow to India ‘s chances of being the Asian supremacy.Anyhow right now with the U.S. nuclear deal being signed chances are there that India might just get to sniff oil after all.