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Re: Russia threatens military response to US missiles
Now it's in the open.
Now it's in the open.
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Re: Russia threatens military response to US missiles
Does someone still believe that missile defense systems such as the Patriot System by LM can shield you from a missile attack?
Personally, I think that such systems are [censorship of bad words here]full of hot air.Comment
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Re: Russia threatens military response to US missiles
Yes. I do.Originally posted by LargoWinch View PostComment
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Re: Russia threatens military response to US missiles
Only during the boost phase will most of these systems work against advanced Russian and Chinese missles, hense the reason why we would want to base the ABM systems as close as possible to the launch, for example in Georgia or the Ukraine if they were admitted to NATO.Originally posted by LargoWinch View Post
The Patriot system and other ABM systems are not going to stop a Multiple Independently targetable Reentry Vehicle or MIRVs like the Russians and Chinese have once the missle achieves orbit and deploys. The new "Bulava" missle being developed by Russia is said to possess advanced defense capabilities making it nearly impervious to existing missile-defense systems. Putin has even bragged about it since it apparently can perform evasive maneuvers during its flight and deploy counter measures.
Cold War II is heating up, and some say Cold WAR I never really ended in the first place. Time to start digging a new fallout shelter in the backyard, perhaps this time I can put in Dish TV.Comment
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Re: Russia threatens military response to US missiles
ASH, somehow I knew you would jump on my comment.
This is a very analysis I just found; however, I remember a documentary on the PAC3 which indicates that the system is very ineffective even against one slow target like a Scud.
I believe that Russia has the ability to send more than one missile at a time, which are better than Scuds.
Overall, I just think that the Patriot is a waste of money and provides for "I feel good" sentiment among allies and lots of dough for LM.
See an example of article below:
US: The Fatal Flaws in the Patriot Missile System
by Jeffrey St. Clair, Counterpunch
April 17th, 2003
This time around it was going to be different. This time around the Patriot missile was going to live up to all the hype, unlike in the first installment of the Gulf War when the missiles nearly struck out against Iraqi Scuds, the softballs of the ballistic missile world.
There was a lot riding on the Patriot missile system's success. Not just the safety of American and British troops and journalists or Kuwaitis and Israelis, who fear they might have been targets of Iraqi Scud missiles (assuming the regime had any left.) The new and improved Patriot missile also was going to demonstrate the efficacy of the Bush administration's mad rush to deploy a revamped Ballistic Missile Defense System, the Star Wars of Reagan's fantasy. Billions in defense contracts were riding on the backs of those missile batteries.
As in the first Gulf War, the initial reports on the new Patriots were breathlessly glowing. As missile sirens went off in ffice:smarttags" />Kuwait, embedded reporters ritually donned their chemical gas masks, descended into bunkers, then emerged minutes later to announce that they'd been saved by the mighty Patriot missile.
The mobile missile batteries supposedly knocked down several Iraqi Scuds headed toward US Army positions and
Then came the really bad news. On March 24, a Patriot missile battery near the
Two days later, the radar for another Patriot missile battery locked on to a US F-16. The pilot of fighter jet located the radar dish and destroyed it.
Then on April 2 an U.S. Navy F/A-18 Hornet was shot down by another Patriot missile, killing the pilot.
"They're looking into a software problem," said Navy Lt. Commander Charles Owens. "They're going to check everything out. When they do find a fault, they'll put it out to the rest of the world."
But Pentagon watchers aren't holding their breath. Based on past experience, it's more likely that Pentagon brass will attempt to obscure the cause rather than reveal a fatal design flaw in a revered centerpiece in the Army's new arsenal of smart weapons.
Indeed, there's plenty of evidence that the Pentagon and the Patriot's contractors (Raytheon and Lockheed) have known for nearly a decade that the missile has difficulties discriminating incoming missiles from friendly aircraft.
The target discrimination problem was first revealed during testing at Nellis Air Force Base in 1993. During that test an U.S. aircraft simulating a return home from a mission was flying in a corridor reserved for friendly aircraft but still would have been "shot down" by the Patriot were it a combat situation.
Over the years, billions had been poured into the program with little sign of improvement in this fundamental and lethal defect. Subsequent exercises and tests have revealed that the Patriot radar discrimination problems were not fixed, according to Philip Coyle, former Director, Operational Test and Evaluation, the Pentagon's independent testing office. Coyle says the problems were identified in so-called Joint Air Defense Operations/Joint Engagement Zones exercises during the mid-1990s.
Despite this, the Pentagon pushed to increase production of the Patriot III in the months leading up to the invasion of
"My recommendation is to buy PAC-3s as fast as we are able to buy them," Kadish said. When asked about problems with the system, Kadish brushed them off, saying they merely "minor" and "annoying." Congress, ever anxious to peddle Pentagon pork, consented, boosting Patriot missile production by more than 10 percent.
As usual with the Pentagon, cost is no object. But the Patriot is very expensive system and it's getting costlier all the time. Raytheon and Lockheed originally promised to deliver the new Patriot system for $3.7 billion dollars. Now the cost has soared to $7.8 billion. Each Patriot missile unit costs about $170 million. In the first Gulf War, an average of four missiles were launched against a single incoming Scud.
The old PAC-2 is seriously flaw. But the new version of the Patriot has struggled through field testing, although this didn't deter the Pentagon's rush to increase production. Through the summer of 2002, the new Patriot missile had failed more than half of its field tests.
From the beginning there were signs of serious glitches in the software program that guides the missile. The program was two years behind schedule and the costs soared from $557 million to $1.1 billion for the software alone. And its still never worked right. By 2001, the cost overruns for the system had topped $10 million a month.
You simply can't trust the Pentagon to be honest about the performance of its big ticket items. During the first Gulf War, the generals crowed about the success of the Patriot, saying that it hit more than 80 percent of its targets. In fact, the missile scarcely hit any incoming missiles, as was revealed in a General Accounting Office investigation. The GAO audit concluded that the Patriot missiles hit less than 9 percent of the Iraqi Scud missiles that were launched during the first Gulf conflict.
"The results of these studies are disturbing," said Theodore Postol, the MIT scientist who studied the Patriot missile's kill rate in the first Gulf War. "They suggest that the Patriot's intercept rate during the Gulf War was very low. The evidence from these preliminary studies indicates that the Patriot's intercept rate could be much lower than 10 percent, perhaps even zero." The Pentagon went after Postol with a vengeance, accusing him of using classified documents for his conclusions on the ineptitude of the Patriot missile system.
What's more disturbing is that the Pentagon knew all this and covered it up. So did the Patriot's prime contractor, Raytheon. In the immediate aftermath of the Gulf War, the US Army issued two assessments on the Patriot missile system's performance: one on Patriot Scud kills in
Why the slow comedown? American wars have served as live fire arms shows. The hype on the Patriot, which the
There were lethal consequences to the Patriot's failures during the first Gulf War, which the Pentagon glossed over. On
The Patriot missile is based on 1970s technology and was originally designed for use as an anti-aircraft weapon, a role it reverted to with tragic consequences in the latest Gulf War. In the 1980s, the Patriot was modified to serve as anti-ballistic missile system for use against short-range rocket attacks.
"The Pentagon has known for a decade that the Patriot cannot distinguish its targets from our own aircraft," says Danielle Brian, Executive Director of the Project on Government Oversight, a Pentagon watchdog group. "It is an outrage that they have not fixed this fundamental flaw, yet continue to buy it and sell it to our allies, and have the gall to promote this weapon in both Gulf Wars as a star when they've known it is a dud."
Link: http://www.corpwatch.org/article.php?id=11110Comment
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Re: Russia threatens military response to US missiles
Originally posted by Lukester View PostASH -
I have a funny little animated cartoon which I'm unable to post on these pages as it's a .MOV file over 1.5 MB in size. A little boy and his mom are at the doctor's office and the doctor has just finished examining the little tyke. His mother askes anxiously what may be ailing him. Meantime the doctor mentions that he wanted to give the boy another test with a piece of diagnostic equipment that has malfunctioned. In the corner of the window you can see the little tyke has wandered away from the mother's anxious hand, and has opened the equipment, deftly tweaked an internal contact and the machine has booted right up again. The doctor turns and gestures towards her happy faced little tyke, now beaming in triumph at the success of his little repair job, and murmurs fearfully to the mother, like an solicitous undertaker, announcing a death in the family or a child born with a fatal disadvantage:
"Your son is destined to become an engineer!".
The mother blanches and nearly faints at the prospect and the good doctor does his best to console her.
The comic is drawn with a wonderful and deft "1950's" tinge to the graphics, and the whole thing comes off as a neat and nostalgic reference to our country when it was coming up fast as the world's most dazzling upsart superpower. It's undertone is one of optimism, mixed with a wry jab at the role of the engineer and also at petit bourgeois society's narrow social horizons.
Done, sir.
That's Dilbert, not a 1950's cartoon, rather 90's -actual. I saw this first on open TV. When my parents saw it they said me "now it's all clear about you"... I've also had a technical "knack" since early age.sigpic
Attention: Electronics Engineer Learning Economics.Comment
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Re: Russia threatens military response to US missiles
Both Kosovo and Georgia are rooted in competition for oil.
Witness the recent announcement of a 4 Billion Barrel Oil Discovery associated with 15 Tcf of gas in Kosovo, near the Albanian Border. This was known years ago.
Georgia was the US/EU/UK transit route for Caspian Basin oil/gas beyond Russian/Iranian control. Yes, the BTC lies for the moment beyond the security zone, but the routes via Poti are intersected by it, since it now extends South Ossetia to the outskirts of Gori. Note that Russia occupies Poti.
Russia has realized that the NATO axis is following the NeoCon plan to encircle Russia and dismember her. Her leadership has successfully turned the economy around and the armed forces too. With this new clout, she is seizing opportunities to reverse 28 years of NATO encroachment into her domain.
I expect to see a crisis fomented in Ukraine, into which Russia intervenes to save her nationals. This will divide what is currently Ukraine into the SE part which fronts the Black Sea all the way to Moldova, incorporating TransDenistre, and a rump Ukraine in the NW third of the country.
I expect to see a crisis fomented in the Baltic States into which Russia intervenes to save her nationals. This will result in rump Baltic States with no ocean frontage, or their total re-incorporation into Russia.
I expect to see the US bases closed in central asia, with NATO in Afghanistan essentially cut off, except for shipments by air. This includes Pakistan, which under the PML-N, will opt to be strictly neutral, will abandon the GWOT, will close the Khyber Pass transit route to military supplies, and will essentially kill the Afghan adventure.
I expect to see Iran become a member of the SCO. Iran will direct it's oil/gas to Asia as part of the deal. Turkey will be essentially dependent upon Russian supplies, and thus compromised.
I expect to see a crisis fomented in Azerbijan, where both Russia and Iran intervene, and divide the country between them, shutting down the BTC, and expanding Iran's part of the Caspian Sea Bed, with Russia getting the fields north of Baku and Iran those south of Baku.
I expect to see Iraq surrounded by Syria, and Iran, with Maliki and Sadr, and Sistiani insisting on a timetable for withdrawal, during which US personnel are subject to Iraq Law.
I expect to see Venezuela, Nicaragua, Cuba, Bolivia, Dominica, Argentina, Brazil, Ecuador, Guatemala, Costa Rica, Panama, and others create a trading zone dependent upon Venezuelan Oil, accelerating the decline in deliveries to the US , and dependent upon Russian/Iranian support.
Russia has understood the message. The proposals of the NATO axis will be countered, by invasion if necessary. Expect to see economic targeting of the US banking and finance system, now in tatters, to crash the US economy. Russia understands this is a "winner take all" event.
INDYComment
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Re: Russia threatens military response to US missiles
this strikes me as a learned and comprehensive assessment of the geopolitical landscape. always one to try to apply this to my 'investment thesis', i'd conclude as follows...Originally posted by goprisko View Post
1. oil prices will continue to rise as major usa sources in the middle east and elsewhere redirect shipments to new allies and away from the usa.
2. dollar will continue to fall as demand for dollars for oil and other transactions falls.
3. dollar will fall also due to falling demand for dollar denominated financial assets as the usa financial system is pushed to the brink in the 'winner take all' event.
but... if your predictions are accurate, shouldn't china et al be slowing and reversing their purchases of dollar assets instead of increasing them as they did recently?Comment
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Re: Russia threatens military response to US missiles
C1ue, I think that what we are dealing with here are a series of events that are partially intertwined, but not entirely related. The most simple explanation is really that these events were kicked off neither by Russia, or by anyone in NATO, but rather Saakashvili, who enjoys a lot of western popularity, much due to his excellent command of the English language.Originally posted by c1ue View Post
see this article from the International Herold Tribune.
Of course, the overwhelming Russian response gave rise to media images of Russian tanks rolling again, which was just enough to trigger the Zeitgeist of the Poles and sway public opinion in the direction of allowing a "missile shield."
This extension of Regan's "Star Wars" has long been a Bush Administration "legacy goal." Hence the main reason why the U.S. withdrew from the anti ballistic missile (ABM) treaty under the Bush Administration back in June of 2002. The invasion of Georgia just happened to give Poland the political will necessary to allow the Bush Administration to fulfill a long awaited goal before their time in office is up.
Further, the truth is that Russia had to deal with NATO and Kosovo and the West must deal with South Ossetia and Abkhazia. This is no temporary U.S. weakness brought on by other wars, the Russians are simply better deployed in that area.
In the short term, the Baku-Tbilisi-Ceyhan pipline is offiline, oil prices are up, and Russia gets to supply more. In the longer term, Russia is asserting itself, and likely preventing central asian states from deciding to get too cozy with another power or trying to route pipelines around Russia (where they are more likely to be damaged by confilict). In the long term, with a growing China on its southeastern boarder, and a growing NATO in the West, Russia needs to work on better integration, but they are left with little choice when confronted with situations like the missile shield.
Long story short, I believe that you have a Georgian government that thought it could get away with crushing dissent within its boarders (particularly during the media spectacle of the olympics), a Russian government that is run by a center-right nationalistic party that took up the banner of its ethnic citizens who were causing the dissent, an American government attempting to break the balance of nuclear power with missile defense (backed by Britain), Western Europe caught in the middle forced to choose sides with nothing to gain by doing so, and Eastern Europe torn between the promise of the West and the cultural/infrastructural ties built into Russia during the Soviet times. There is no grand plan here, just different actors with different agendas converging.
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Re: Russia threatens military response to US missiles
Hi Largo. I was responding to the technical question in a narrow sense, but not commenting on the larger tactical issue of whether Patriot batteries would themselves be effective against a Russian attack, the strategic issue of whether missile defenses in general are a good idea, or the political issue of whether missle defenses are a good use of public funds.Originally posted by LargoWinch View Post
I have no dispute with the information in the article on the Patriot which you quote -- only the context in which it is interpreted and the author's editorial comments. As the article says, the Patriot is an anti-aircraft missile from the 70's that was modified in the 80's to shoot down simple short-range missiles designed in the 50's. It blew chunks in the operating environment of Gulf War I, and was hastily modified after the war. As of five years ago, multi-shot salvos were required to reliably down single 50's vintage short-range missiles, and the system was a danger to friendly aircraft in the airspace. Software and radar have been recurring problems.
This is about par for the course, as far as development of new military technology goes. Are you aware that for the first two years of American involvement in WWII, we sent our submarines to fight the Japanese armed with dud torpedoes? Have you seen footage of our spectacular early rocketry failures? Yes, the Pentagon and defense contractors chronically over-sell the technical readiness of the newest hardware and under-estimate development costs, but if history is any guide, that is no basis for doubting the eventual outcome. Can you name a single American weapons system that took less time and money to develop than initially proposed? I can't. Yet, at the end of the day, America fields a whole array of weapons systems which DO work, many of which provide capabilities that are generations ahead of hardware fielded by other nations.
For the record, my guess is that by now the Patriot system probably works adequately well against 50's vintage missiles like the Scud (and its myriad progeny), but it is kind of a side show in the arena of ballistic missile defense. It is irrelevant to strategic defense, and will be inferior to the theater anti-missile systems that were designed from the ground up to enage missiles rather than aircraft, such as the Israeli/US Arrow or the American THAAD.
In my view, the technical issues are much less important than the strategic and financial issues. Can an ABM system like the Patriot defend against ballistic missiles? Certainly -- systems like the Patriot can defend against short-range missiles, and other ABM systems can defend against medium- and long-range missiles... if you care to spend the money. But building and improving the interceptor costs a lot more than building and improving the threat -- if you face an opponent with equal resources, you will lose that race. These systems will cost an awful lot, take a long time to field, and will ultimately only be of use against third-world missile forces.
This brings me to my last point -- except in the case of an American first strike which succeeds in largely disarming Russia, these ABM systems are basically irrelevant to Russia's security. I agree with seanm123 about the limitations of a terminal-phase defense system like the Patriot, and the challenges posed by multiple independently-targeted reentry vehicles, decoys, and maneuverable reentry vehicles. Russia's ability to field such technology at a fraction the cost of what it takes for us to develop a limited ABM capability is precisely why limited American missile defense undermines deterence less than it would first appear. I disagree with seanm123 regarding the prospect for boost-phase interception of Russian missiles from sites in Eastern Europe. Russia is not going to launch ICBMs from its western border -- that is what Siberia is for. We can't get close enough to Russian launchers for boost-phase interception. That is actually one of the many attractions of boost-phase systems: they are ineffective against countries like Russia and China, and so should be less of a provocation.
The ineffectiveness of our ABM system against a Russian threat is why the security significance of American ABM facilities in Eastern Europe does not lie in their capacity to intercept Russian missiles (marginal at best), but -- as I have written previously -- in concretely tying those countries into America's nuclear deterent. Once those bases are in place, an attack on those countries will be an attack on America's strategic military assets, and will therefore require a cataclysmic response. Therefore, the attack won't happen.
The fly in the ointment is that the Russians may think us capable of a first strike, which is the one case in which these arguments don't hold; that is the main reason I think our present course is inadviseable.Comment
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Re: Russia threatens military response to US missiles
One of our Russian contacts comments:Originally posted by goprisko View Post- Putin is one of the richest people on earth, and should be in Guinness book for going from net worth of an average Joe to billions within 2-4 years of dismantling Yukos and appropriating a lot of other assets through Ganvor, Baikalfinansgrup and other schemes. He and Medvedev are personally interested in oil prices staying high.
- However, while Russian occupied Gori, through which Azeri oil was going into Turkey and through Turkey to other countries, the oil pumping was left intact. Putin obviously didn't want to break the rules of the club; it's one thing to occupy a tiny country but it's another, to steal from some big oil interests or to harm them.
- Control of Poti is probably just a bargaining chip, and Putin loves to collect bargaining chips for future use. As you know, he insinuated to CNN and Georgia's silly invasion into "South Ossetia" was sanctioned by the US. Just another bargaining chip. He doesn't have any plans. He just plans to survive. He won't have an open conflict with the West. After all, he keeps his money in Switzerland and other "safe" western banks where the rule of law protects his stolen wealth.
- There is a HUGE ongoing conflict developing inside the SCO from day 1: the Russians are trying to use it as a military alliance and are against the shared open market because cheap Chinese goods and labor, and, increasingly, Chinese Capital, will erase any Russian influence in the former Soviet Asian republics. Russia has only some weak support from Tajikistan and maybe Turkmenistan in that, and these are two weak members. China is treating SCO as its own domain and its first step into establishing hegemony over Eurasia. It also has strong ties with Kazakhstan – its future province, just like Siberia – increasingly stronger ties with Uzbekistan, and these two are much stronger countries, and making great progress in Kyrgyzstan. Russia is totally doomed in SCO, and it's just trying to use it to keep China at bay – and that won't work. In the following decade or two the Chinese-Russian conflict will be much more visible. To add to that, almost all countries in SCO have territorial claims against others in SCO and, without exception, authoritarian regimes that only look out to save the status quo. There will be NO plotting against the West, doesn't matter how much Russia may try to do so inside SCO. Note how SCO's resolution on Georgia stressed that Georgian territorial integrity should be preserved - certainly NOT what Russia wanted, yet it signed it because there were also words about supporting Russia's "peacekeeping efforts." That's the formula.
- Russia produces 2% of the world GDP, more than 50% of it in oil, gas and other things Russians dig out of the ground and sell (oil, platinum, emerald, silver, coal, etc.). The US and EU produce 50% of world GDP. Only a crazy person can think of any way in which Russia can compete with the West. The Russian military is a joke - they trashed Georgia, but Georgia had barely any army. Russia hasn't built any major military ships for a decade, the fleet is dying, it can't play any role outside of its own territory. Russia does have great aviation but that's while the last old timers are still working on them. In 10 years and Russian planes will be as bad as Russian tanks.
- I'm not a fan of Bush or the Neocons but the idea that the Neocons plan to dismember Russia is unrealistic. Rice, who has a PhD in Russian Politics and History, Perle, and others know what will happen if a large nuclear country is split into parts. I think that's why Kerry and Gore lost to Bush. Democrats can only try to replicate Rove's line of chatter but it's so NOT organic, and sounds so fake coming from them. Rice hoping for 64 small nuclear countries? Not likely.
Ed.Comment
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Re: Russia threatens military response to US missiles
Originally posted by goprisko View PostDoes not sound very plausible at all. The notion of post Soviet Russia rolling out a series of national "anschluss" moves, (as in Nazi Germany summarily annexing Austria) with impunity, consecutively from Central Asia through the Caspian and all the way up to the Baltic seems just silly. It is posited in a near-vacuum of Western nation response, let alone any response from the rest of the world. All that's impressive looking in this picture is it's intricate references to multiple geographic pieces while depicting a masterfully executed geo-strategic gameplan carried out in orderly fashion while the rest of the world presumably watches lethargically. Goprisko's description is of the equivalent of a World War, started by a country of 140 million people with remnants of it's Warsaw Pact forces.Originally posted by metalman View Post
The source quoted by iTulip below sounds far more plausible.
It's messy, with a lot of unpredictability acknowledged, which is the hallmark of realism. It discards the idea of any "master plan" of breathtaking geographical sweep. It recognizes the "entropy" which would face any purported "Russian geo-strategic plan" due to constantly shifting conflicting interests in the Central Asian Republics, Iran, China, to working as a tightly cohesive group. It recognizes the underlying deep unease between resource poor and heavily overpopulated China, eying Kazakh and Siberian riches in the ground, and Russia, with a population about 1/8 of China's and one of the longest mutual borders in the world. Due to this, it points out why Russia & China constituting stable components of an SCO "alliance" is implausible. It points out why the notion that US government / intelligence estimates calling for the "dismemberment of Russia" makes little sense, due to a consequently unsecured nuclear arsenal.
Originally posted by FRED View PostComment
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Re: Russia threatens military response to US missiles
D,Originally posted by dcarrigg
I believe what you've stated here is what many people would like the historical record to show.
However, the buildup along the South Ossetian border, along with a similar Russian buildup, was something which started only very recently.
Furthermore there were efforts by the Russians to notify the US that something was up.
Please check out this article on Der Spiegel:
http://www.spiegel.de/international/...574812,00.html
Furthermore it is equally interesting that - in this shooting war context - that every turn towards a lower temperature gauge is followed by another jab in someone's eye.
As for goprisko's outline of future events - there are parts I agree with, and parts I don't.
Certainly the Ukraine has its separatist regions in the Crimea, while Moldova also has a couple of would-be secessionists.
However, the bigger context is that Russia has been supplying subsidized energy to many of its previous Soviet neighbors.
There is no reason that this must continue - especially if said regions are behaving in ways which Russia does not like.
There is no particular economic reason for targeting the Baltic states - neither oil nor security for the port of St. Petersburg.
As for Venezuela - until I see a significant increase in its refining capability, I'm very unclear on whether they could supply that network of nations outlined.
The Iran/SCO is a nice rumor - but then how does the SCO's recent disavowal of Russia's moves re: South Ossetia and Abkhazia play?
Doesn't seem very consistent.
The timeline outlined also seems to assume a Cold War Nato vs. Komintern situation, when in reality we have at least a 4 pole world: Europe, China, Russia, Brazil/India/GCCs.Comment
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Re: Russia threatens military response to US missiles
Russia may cut off oil flow to the West
By Ambrose Evans-Pritchard
Last Updated: 9:26pm BST 28/08/2008
Fears are mounting that Russia may restrict oil deliveries to Western Europe over coming days, in response to the threat of EU sanctions and Nato naval actions in the Black Sea.
Any such move would be a dramatic escalation of the Georgia crisis and play havoc with the oil markets.
Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for a supply cut to Germany and Poland through the Druzhba (Friendship) pipeline. It is believed that executives from lead-producer LUKoil have been put on weekend alert.
"They have been told to be ready to cut off supplies as soon as Monday," claimed a high-level business source, speaking to The Daily Telegraph. Any move would be timed to coincide with an emergency EU summit in Brussels, where possible sanctions against Russia are on the agenda.
More on oil
Any evidence that the Kremlin is planning to use the oil weapon to intimidate the West could inflame global energy markets. US crude prices jumped to $119 a barrel yesterday on reports of hurricane warnings in the Gulf of Mexico, before falling back slightly.
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Global supplies remain tight despite the economic downturn engulfing North America, Europe and Japan. A supply cut at this delicate juncture could drive crude prices much higher, possibly to record levels of $150 or even $200 a barrel.
With US and European credit spreads already trading at levels of extreme stress, a fresh oil spike would rock financial markets. The Kremlin is undoubtedly aware that it exercises extraordinary leverage, if it strikes right now.
Such action would be seen as economic warfare but Russia has been infuriated by Nato meddling in its "backyard" and threats of punitive measures by the EU. Foreign minister Sergei Lavrov yesterday accused EU diplomats of a "sick imagination".
Armed with $580bn of foreign reserves (the world's third largest), Russia appears willing to risk its reputation as a reliable actor on the international stage in order to pursue geo-strategic ambitions.
"We are not afraid of anything, including the prospect of a Cold War," said President Dmitry Medvedev.
The Polish government said yesterday that Russian deliveries were still arriving smoothly. It was not aware of any move to limit supplies. The European Commission's energy directorate said it had received no warnings of retaliatory cuts.
Russia has repeatedly restricted oil and gas deliveries over recent years as a means of diplomatic pressure, though Moscow usually explains away the reduction by referring to technical upsets or pipeline maintenance.
Last month, deliveries to the Czech Republic through the Druzhba pipeline were cut after Prague signed an agreement with the US to install an anti-missile shield. Czech officials say supplies fell 40pc for July. The pipeline managers Transneft said the shortfall was due to "technical and commercial reasons".
Supplies were cut to Estonia in May 2007 following a dispute with Russia over the removal of Red Army memorials. It was blamed on a "repair operation". Latvia was cut off in 2005 and 2006 in a battle for control over the Ventspils terminals. "There are ways to camouflage it," said Vincent Sabathier, a senior fellow at the Centre for Strategic and International Studies in Washington.
"They never say, 'we're going to cut off your oil because we don't like your foreign policy'."
A senior LUKoil official in Moscow said he was unaware of any plans to curtail deliveries. The Kremlin declined to comment.
London-listed LUKoil is run by Russian billionaire Vagit Alekperov, who holds 20pc of the shares. LUKoil produces 2m barrels per day (b/d), or 2.5pc of world supply. It exports one fifth of its output to Germany and Poland.
Although Russia would lose much-needed revenue if it cut deliveries, the Kremlin might hope to recoup some of the money from higher prices. Indeed, it could enhance income for a while if the weapon was calibrated skilfully. Russia exports roughly 6.5m b/d, supplying the EU with 26pc of its total oil needs and 29pc of its gas.
A cut of just 1m b/d in global supply – and a veiled threat of more to come – would cause a major price spike.
It is unclear whether Saudi Arabia, Kuwait or other Opec producers have enough spare capacity to plug the shortfall. "Russia is behaving in a very erratic way," said James Woolsey, the former director of the CIA. "There is a risk that they might do something like cutting oil to hurt the world's democracies, if they get angry enough."
Mr Woolsey said the rapid move towards electric cars and other sources of power in the US and Europe means Russia's ability to use the oil weapon will soon be a diminishing asset. "Within a decade it will be very hard for Russia to push us around," he told The Daily Telegraph.
It is widely assumed that Russia would cut gas supplies rather than oil as a means of pressuring Europe. It is very hard to find alternative sources of gas. But gas cuts would not hurt the United States. Oil is a better weapon for striking at the broader Western world.
The price is global. The US economy could suffer serious damage from the immediate knock-on effects.
While the Russian state is rich, the corporate sector is heavily reliant on foreign investors. The internal bond market is tiny, with just $60bn worth of ruble issues.
Russian companies raise their funds on the world capital markets. Foreigners own half of the $1 trillion debt. Michael Ganske, Russia expert at Commerzbank, said the country was now facing a liquidity crunch. "Local investors are scared. They can see the foreigners leaving, so now they won't touch anything either. The impact on the capital markets is severe," he said.Comment
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Re: Russia threatens military response to US missiles
No shortage of buyers ex-NATO...Comment
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