Top > Business > 2007 > January > 2007-01-01

Georgia gives in to Russia?s doubled Oil Price

As the well publicized showdown between Russian Oil Giant Gazprom and the tiny republic of Georgia came to a close, Russia proved once more that it has the means to force through it?s will even against international opposition if former members of the Soviet Union are concerned.

Since Georgia arrested four Russian Nationals under the suspicion of spying, Russia has used heavy diplomatic artillery, like blocking the important Georgian exports wine and mineral water, toughening up against Georgian immigrants to Russia and even imposing an air, sea and postal blockade on Georgia. When Gazprom, which is widely understood to be the Kremls long arm in the world, demanded to raise the price it charges to Georgia by over 100 percent, Georgia cried foul and the world agreed. Even though Gazprom claims that the steep hike in prices is intended to even out the difference to European prices, Georgia claimed that it was being punished and refused negotiations.

Now, just one hour after the Russian Oil Manufacturer Gazprom threatened to halt supplies to Georgia, the small Republic agreed to pay the new price of $235 for 1000 cubic meters, a rise of $125 from the previous price of $115. A Gazprom official stated that for now, an agreement was made for 1.1billion cubic meters over the next year. At the same time Georgia is looking intensively for alternative suppliers. Currently officials are reported to be in talks with Turkey and Azerbaijan.