Russia opens oil port that will supply China Japan and South Korea

Last week Russian Prime Minister Vladimir Putin attended the ceremonial opening of what will become Russia’s third largest oil port. The port is on the Pacific Coast of Siberian Russia, just north of South Korea and Japan.

The port will serve as the final Russian land destination for a multibillion dollar oil pipeline that runs from the northeastern Siberian oil fields to the ocean port in the city of Kozmino.

From there the oil will travel by oil tanker into the most lucrative of the Asian markets in China, Japan and South Korea.

The port is already turning out 300,000 barrels per day, but by the time the pipeline is fully operational it will be producing 1,000,000 barrels per day for the growing Asian markets.

To say that this pipeline is a geopolitical game changer would simply be an understatement.

With the opening of this port Russia now has a significant second market to export oil to outside of Europe. This broadening of Russian options will likely drive up oil prices for much of Europe, particularly Germany which relied heavy on Russia for much of its oil imports. If Germany does not agree to pay for the likely price increases, Russia now has the option of completely turning their back on Germany in favor of the big three Asian markets.

This may in turn force Germany to become more involved in the Middle East with such countries as Saudi Arabia and the UAE.

Up until now Russia was only able to ship oil to China by rail, which is an expensive process that is not efficient and cannot handle large volumes of oil. Russia realized that it was missing out on easy revenue by lacking such a pipeline.

In two years the Russia pipeline will also be equipped with a natural gas component. This will do to European natural gas prices what the current set up will do to oil prices.

This recent pipeline by Russia brings back painful memories for its eastern satellites such as Ukraine who were cut off from Russia’s natural gas supplies during the cold winter months as a way to get them to submit to their estranged big brother.

These developments out of Russia took place just one week prior to Turkmenistan opening a new natural gas pipeline to Iran that will allow Turkmenistan to double its natural gas exports to Iran, along with a new natural gas pipe line they opened to China last month.

Noticeably missing from both of these deals are the European Union and the US or any US client states. And don’t think this is going unnoticed by the planners in Washington. If anything this will go a long way in Washington wanting to tighten its relationship with the crown jewel in their ally crown, Saudi Arabia.

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