CYPRUS PLUS

CYPRUS PLUS

Alan D. Berlind

The recent post by this inattentive blogger (“A CYPRUS SOLUTION”) named various political and geographical entities that have substantial interests in the success of the discussions underway between the two Cypriot communities aimed at re-uniting them under a single sovereign banner:  Cyprus herself, the United States, Turkey, Israel and the European Union, with special mention of France and Italy.  One might have included Russia but did not, principally because its national interests did not seem to be obviously at play.  Wrong!

Last week’s tumultuous events in The Ukraine and, most importantly, Russia’s military intervention in The Crimea have created a political situation that would seem to require, or at least to provide an excuse for, retaliation before Moscow steps over the line in an attempt to ensure that The Ukraine returns to the “Soviet orbit” before getting too close to the EU.  Leaving that scary scenario to the government leaders most responsible for preventing or containing a wider war, we might review certain facts and figures that bring to the fore the possible economic/commercial consequences of a Cyprus settlement as discussed briefly in the earlier post:  the introduction into the European market of serious supplies of fossil fuels not available to date.

Russia is by far the largest supplier of both natural gas and crude oil to the nations of the EU.  The following approximate figures – which are constantly changing –   tell the tale.  As a whole, the EU imports some 40% of its natural gas from Russia via thirteen pipelines that follow three separate routes, with Ukrainian territory a major conduit.  The biggest importers by volume are Germany and Italy, but as many as ten EU members get over half of their supplies from Russia.   In addition, five non-EU countries, including most significantly for our purposes, Turkey, get well over half of their gas from the same exporter.  To complete the picture, Russia furnishes more than 30% of the EU’s crude oil needs.  As stated, these figures, as well as the prices that gas and oil bring, are in constant flux.

While the amounts to be produced by Cyprus’ new industry and the role to be played in European and other markets also remain to be seen, success in the current effort to re-create a single international entity on the island cannot but have an important effect well beyond its borders.

END

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