Long-simmeriung issues in the global energy industry are veering into the absurd.
Last week news
began to break about the expansion of fundamentalist Sunni militia ISIS into Iraq. Now Putin has shut off the flow of natural gas into Ukraine over disputed payments.
The global energy situation has just grown a little more dire. The price of energy is rising again, slowing the pace of any economic recovery.
In Iraq, ISIS has taken control of key cities like Mosul and Tikrit. The militia is said to be executing vast numbers of Shia and has captured vast numbers of US-manufactured weapons. The group is now controlling oil wells in Syria, the revenue from which is, apparently being used to fund operations. US-armour is being painted white, flying the black flag of ISIS as fundamentalist cultural prohibitions against music, dancing are being enforced in the controlled regions.
In the north of Iraq Kurdish Peshmerga have taken advantage of the chaos, have moved south to occupy Kirkuk and the Rumailia oil field—long a coveted goal of the rising Kurd Nation. In America Obama has pledged air support but no ground troops, yet. Interestingly, the rise of the Sunni militia sees Iran and the U.S. allies of a sort. Iran is the spiritual homeland of the Shia. A key Shia cleric has called his supporters to join the fight to save Baghdad from falling to ISIS as American personel have been evacuated from the massive U.S. embassy there.
Over in the Ukraine Putin is, again, wielding the energy weapon. A dispute over the amount of money owed Russia for natural gas shipped through Ukraine to Europe has played out over the last couple weeks. Russia increased the price of gas for Ukraine, which balked at paying the bill. Now Putin has cut off the flow of gas to Ukraine. The last time he did so was New Year’s Day 2006 when the same issue flared up then.
The rising price of energy will temper any economic recovery in the United States. The sabre-rattling in Europe continues to fuel the already low-level war going on between western-backed Ukrainian forces and Russians in the eastern part of that country. That a Ukraine minister has been quoted as calling Putin a “dickhead” likely does not help the situation.