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16 Apr, 2011 06:30

EU may pay high price for shunning Russian oil

EU may pay high price for shunning Russian oil

The world is paying the price for the unrest in the oil-rich Arab world and is now scrambling for cheaper alternatives to the growing cost of fuel.

Top EU officials are frenetically determined to avoid one of the world's top gas exporters, Russia, as they strive to secure affordable energy, a guideline that has proved to be quite problematic over the last decade.Soaring oil prices mean filling up a truck these days costs a cool €1,500 so no wonder the road ahead looks bleak, particularly for ground logistics companies.“If you’re not watching it closely then you go bankrupt,” says Frank Vanbeker, the Head of Vanbeker-Heymans Transport company.Turmoil in Libya and the oil-rich Middle East has hit EU supplies and shot up prices. But there could be an alternative.“If North and South Stream [pipelines] were already built, supply risks and energy prices would be lower,” reasons Russian Prime Minister Vladimir Putin.The EU is refusing to back new Russian projects to supply energy. It is continuing to insist on “diversity of supply”.European Commission spokesperson for Energy, Marlene Holzner, shared with RT that “We support, especially, projects which give us access to new sources, which is why Nabucco is our priority.”“We would like to have Azerbaijan as a partner but we would also like Qatar and other countries in the world,” Holzner confides.The EU funds and fast tracks the Nabucco gas pipeline from Azerbaijan through Turkey, but not Russia’s North or South Stream.Yet Nabucco costs much more to build, its suppliers have no known resources to spare, and the logic of building it is even questioned by participants.Analysts say the EU is making a very expensive mistake.Dr. Greg Austin, the Vice President of Program Development and Rapid Response at the EastWest Institute says, “Of course when there are big economic problems and social changes like we are seeing in the Arab world, the current trouble in the Middle East does show that Europe has a reliable energy partner in Russia, compared with some other places.”If violence in the Arab world continues into next month, experts tip fuel prices to double again. That thought fills low earners in particular with dread. First and foremost, the EU’s lack of confidence in Russia is hurting its own citizens.The EU policy is making it hard for people to get by, as the high petrol prices leave them short of money for food. And if prices double, they do not know how they will cope.

Mahdi Darius Nazemroaya, expert in Middle Eastern and Central Asian affairs, believes the European economy is being remodeled as the EU drives itself further into the orbit of the United States. “They are backing away from Russia, which is an actual, dependable and stable form of energy for Europe. When they get involved in such operations as the ones in Iraq or in Libya, they know very well strategically what the outcome will be,” he said.“So we’re going to see Europe remodeled and integrated further with the United States”.

Libyan conflict shows little sign of letting up. Chicago-based radio host and author Stephen Lendman believes Western involvement is all about a power grab – one which includes a lot of things. "It includes controlling the resources, exploiting the people, privatizing the state enterprises, letting the IMF and the World Bank move in, to structural adjustments, the usual ones, meaning low wages, mass lay-offs, a deep deprivation for the ordinary Libyans. Gaddafi – no democrat by any means – but he gave Libyans free education, free health care. All this will be swept away if Gaddafi is gone," says Lendman.