Russia and Georgia: All About Oil

Michael Klare | August 13, 2008

Editor: John Feffer

In commenting on the war in the Caucasus, most American analysts have tended to see it as a throwback to the past: as a continuation of a centuries-old blood feud between Russians and Georgians, or, at best, as part of the unfinished business of the Cold War. Many have spoken of Russia’s desire to erase the national “humiliation” it experienced with the collapse of the Soviet Union 16 years ago, or to restore its historic “sphere of influence” over the lands to its South. But the conflict is more about the future than the past. It stems from an intense geopolitical contest over the flow of Caspian Sea energy to markets in the West.

This struggle commenced during the Clinton administration when the former Soviet republics of the Caspian Sea basin became independent and began seeking Western customers for their oil and natural gas resources. Western oil companies eagerly sought production deals with the governments of the new republics, but faced a critical obstacle in exporting the resulting output. Because the Caspian itself is landlocked, any energy exiting the region has to travel by pipeline – and, at that time, Russia controlled all of the available pipeline capacity. To avoid exclusive reliance on Russian conduits, President Clinton sponsored the construction of an alternative pipeline from Baku in Azerbaijan to Tbilisi in Georgia and then onward to Ceyhan on Turkey’s Mediterranean coast -- the BTC pipeline, as it is known today.