Analysis: energy pipeline that supplies West threatened by war Georgia conflict

The conflict that has erupted in the Caucasus has set alarm bells ringing because of Georgia's pivotal role in the global energy market, ‘Times Online’ reports today.

Georgia has no significant oil or gas reserves of its own but it is a key transit point for oil from the Caspian and central Asia destined for Europe and the US.

Crucially, it is the only practical route from this increasingly important producer region that avoids both Russia and Iran.

The 1,770km (1,100 miles) Baku-Tbilisi-Ceyhan pipeline, which was concluded last year only, pumps up to 1 million barrels of oil per day from Baku in Azerbaijan to Yumurtalik, Turkey, where it is loaded on to super-tankers for delivery to Europe and the US. Around 249km of the route passes through Georgia, with parts running only 55km from South Ossetia.

The security of the BTC pipeline, depicted in the James Bond film The World is Not Enough, has been a primary concern since before its construction.

The first major attack on the pipeline took place only last week - not in Georgia but in Turkey where part of it was destroyed by PKK separatist rebels.

Output from the pipeline, which is 30 per cent owned by BP and carries more than 1 per cent of the world's supply, is likely to be on hold for several weeks while the fire is extinguished and the damage repaired.

But the threat of another attack by separatists in Georgia itself is very real.

Only a few days before the Turkish explosion, Georgian separatists threatened to sabotage the pipeline if hostilities continued.

The latest eruption of violence could easily spur fresh attacks. The BTC pipeline, which is buried throughout most of its length to make sabotage more difficult, was a politically highly charged project.

It was firmly opposed by Russia, which views the Caucasus as its own sphere of influence and wants central Asian oil to be exported via its own territory.

Russia also backs the South Ossetian and Abkhazian separatists in Georgia and relations between Moscow and Tbilisi have curdled into outright hostility in recent months.

The BTC pipeline, which cost $3 billion to build, is a key plank of US foreign policy because it reduces Western reliance on oil from both the Middle East and Russia.

EU Begins Enforcement of New Iran Sanctions

The European Union has approved a new set of sanctions against Iran over its disputed nuclear program.

The EU Friday says it will start to implement financial and shipping restrictions approved by the United Nations in March.

The measures call for EU financial institutions to exercise greater vigilance over any grants or other assistance, including export credits, for Iran. They also mandate more inspections of cargo to and from Iran.

The language also warns EU members about dealings with certain Iranian entities, including Bank Saderet and Iran Air Cargo.

The five permanent members of the U.N. Security Council and Germany have offered Iran a package of incentives if it stops enriching uranium. Iran has yet to give a clear response.

Earlier, the United States said six major world powers - the U.S., Britain, France, Russia, China and Germany - have agreed to consider a new round of sanctions against Iran.

The British and French foreign ministries also said Wednesday that Iran may face additional sanctions.

But, Russia's U.N. Ambassador Vitaly Churkin says he is not aware of a consensus with the other five powers on new sanctions. He says there still is a potential for dialogue to resolve the dispute.

Iran insists its nuclear program is for peaceful purposes. Western countries suspect Iran of enriching uranium in an effort to acquire nuclear weapons.

Georgia, Russia 'very close' to war over breakaway republic South Ossetia

Georgia cabinet minster says Georgian troops are in control of capital of South Ossetia, four Russian warplanes shot down; Russian military officials claiming 10 "peacekeepers" killed, 30 wounded in fighting.

Reuters reports Russian Foreign Minister Sergey Viktorovich Lavrov says he is "receiving reports of ethnic cleansing in villages of South Ossetia" as violence escalates Friday in the breakaway province.

Georgian forces have reportedly shot down two Russian combat planes and Russia has sent 150 tanks and armored vehicles into the territory as what started as a regional conflict between Georgia and separatists threatens to build into all-out war.

A senior Georgian security official said Russian jets bombed Vaziani military airbase outside the Georgian capital, Tbilisi, Reuters reports.

"No one was wounded but some buildings have been destroyed," Kakha Lamaia told Reuters. The airbase is about 15 miles from Tbilisi.

"They have declared war against us," Lamaia told Reuters.

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The Russian escalation of the conflict with Georgia might trigger, in the near future, more aggressive policies regarding Iran—one should not rule out even a strike and/or an invasion.

Romania Report & sources