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Putin Visits Turkey: Oil Prices, Ukraine, Georgia, Cold War, World War

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Putin’s state visit to Erdogan yesterday in Ankara, a summit meeting between the world’s two top pseudo-democratic authoritarian regimes, can determine the direction of history for some decades. If you think I exaggerate, keep reading. Anyone moderately literate in the world’s strategic balances knows exactly what I mean. I will add some less visible but pivotal factors that, in toto, could affect all our lives. At stake is not merely the future of Syria, ISIS and the like, but the price of oil, the fate of sanctions, the democracy vs. autocracy struggle, Nato, EU, Cold War, even Nuclear War. The world is poised so precariously that, as others have noted, we could be at a pre-WW1 moment on the verge of Great Power conflict.

Back in mid-October I discussed the likely drop in oil price, now occupying headlines, to outline how Saudi Arabia meant to use oil power to push back Moscow for supporting Assad. Moscow aimed veiled threats at the Saudis for playing a political game in collusion with the US. Riyadh knows that Putin’s bluster evaporates domestically without gas and oil revenues, and externally without pipeline leverage. In the column I point out how, in fact, Saudi Arabia intends to push back against the US equally; a very low oil price endangers the cost-effectiveness of fracking. The Saudis aren’t pleased with Washington’s increasing alignment with the Shiite Crescent in the Mideast. Then, in November, I wrote in this space about a telephone quarrel between Erdogan and Putin. I dwelt on Erdogan’s gas deal with Turkmenistan and Putin’s narrowing timeline for bullying Ukraine with a compliant EU – compliant because of EU dependence on Russian gas supplies.

That’s the background to the Ankara summit meeting. Up to now, Putin was able to slow down all manner of alternatives to Russian fuel by lowering prices, intimidating suppliers and users, and condign gestures of violence. It is all on the verge of busting out of his control. Gazprom has just announced they’re abandoning a pipeline plan to circumvent Ukraine. In addition, as the link shows, Erdogan signed a deal to import and pass on Turkmen gas ultimately to Europe. Plus, a pipeline via Turkey from Azerbaijan will reach Europe in four years.

Meanwhile, Bloomberg just published a report on the Ankara visit saying the meeting will result in lots of harmony because Turkey has no alternate to Russian gas. The report also asserts that Russia serves as Turkey’s second largest trade partner. With all due respect, the truth is much more complicated. Erdogan understands Moscow’s increasing weakness. Indeed, Erdogan himself embodies the weakening threat, being the conduit for multiple ways Europe will get fuel supplies – from Azerbaijan, from Turkmenistan, from Iraq. On the other hand, like others in the region, he has begun to detach from the West. He’s actually planning to have Russia build nuclear power stations in Turkey. The stupidity of this idea has many layers, not least the dependence on Moscow. Clearly Erdogan wants to acquire a nuclear guarantee for himself and his regime, not a happy sign for Turkey’s future democracy.

Meanwhile, Putin has made his moves to pressure Turkey. Not many people know that Georgia’s current government acceded to Russian demands to build a strategic road from Russian Daghestan through Georgia to the Azerbaijan border. This will allow the Kremlin to move assets to seal off the Azeri border at any time. Meaning, isolating Azerbaijan from trade with Turkey via Georgia, and with Georgia itself, in effect sealing off Azerbaijan from the world. You can be sure that Georgia’s regime will act in solidarity with Moscow. The PM in Tbilisi just said, in a November 25 interview with the FT, that he opposes Western arms for Ukraine. This is the same government that has not uttered a word against Putin or for Ukraine against Putin. Essentially, the Kremlin’s message to Turkey goes something like this: don’t bank on your Azerbaijan supplies, neither for yourself nor as a conduit to Europe. Nor should you have faith in the future autonomy of Azerbaijan to make choices, and that goes for Turkmenistan too. Do you think that the US or Nato will come to your side when Russian tanks invade those places and cut you off from their oil and gas? So far Erdogan has no reason to doubt Putin’s threat. The last thing Erdogan can handle, with its southern border aflame, is a military threat reopening on Turkey’s northern flank.

So that’s how the forces are balanced at the summit. Putin will keep raising the threshold of his threats – many think he will actually use nuclear weapons, even if through deniable proxies, even if only tactical weapons. After Assad’s chemical weapons, and pro-Russian rebels downing a civilian airliner – without consequences – can we dismiss the notion? For sure, Erdogan can’t. Having alienated Nato and emasculated his army, he knows nobody will fight a world war to defend him. As for the US and EU, they have a lot to answer for by ignoring Putin’s aggression in Georgia and then in Ukraine. They emboldened him to believe that no single country’s fate will spur them to face him down. They’ve dropped all red lines so at no juncture were his atrocities pivotal. He has built up his threat incrementally, stealthily. He has made his message clear. He doesn’t think he needs to up the ante anymore but he will if necessary – it might even lead to a world war, if necessary. That’s the message. With the drop in oil prices, he may have to and the West will have to respond.