Monday, January 02, 2006

Russia, Ukraine and the Joy of Competition

Russia recently has entered into a dispute with Ukraine after they cut off natural gas supplies from Ukraine after the expiration of the current contract. The real problem is that Ukraine is where the natural gas to Europe goes through and is saying they will take gas instead of transit fees. Natural gas prices in Europe have shot up. This case clearly shows the dangers of relying on any one group to supply a necessity. This is why I don't think widespread boycotts of middle-eastern oil is a good thing. The money may go to support terrorism but the important thing is to make collusion/ natural problems have less of an effect on the economy and the market. Russia seems to consider Ukraine as a Taiwan type country to be meddled with as needed. When the power of orange elected the non-Kremlin candidate Russia decided to retaliate. One can only hope this solved peacefully and without the use of serious weaponry.

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