Since the beginning of the year, events have rocked places that seemed locked in time. One outcome has been utterly unpredictable oil prices -- $114 a barrel one month, and the low $90s for a barrel of crude that we see now. Shorn mainly of the Arab Spring, oil prices would be somewhere in the $60-$80 range per barrel, according to market watchers such as ExxonMobil CEO Rex Tillerson and Saudi Prince Al Waleed bin Talal. Traders say the Middle East trouble poses risks to the world oil supply, especially if another big oil producer goes off the market, such as Saudi Arabia.
One place the market is excluding from its calculus is Azerbaijan, 1,400 miles further east, which has been shipping between 800,000 and 1 million barrels of high-quality oil into the global market for the last five years. As we've discussed, I myself don't usually think about Azerbaijan in terms of market-shaking instability. Yet, no one expected what we are currently observing in the Middle East, either. As we know from history, including the start of World War I, loose tongues, swollen heads, and distracted minds can lead inadvertently to war. Hence, Azerbaijan merits a look.
Tomorrow, the leaders of this Caspian Sea nation and its blood enemy, neighboring Armenia, are to meet in the Russian region of Tatarstan in an attempt finally to begin to bury their 23-year-long, on-and-off violence (Azerbaijan President Ilham Aliyev and Armenian President Serge Sarkissian pictured above, respectively, with Russia's Dmitry Medvedev). When the countries fought in actual combat -- from 1988 to 1994 -- Azerbaijan lost badly. Armenia captured about a fifth of its territory, including the disputed enclave of Nagorno-Karabakh. Armenia continues to hold this turf, from which all Azeris have long fled or been expelled.
Yet, for at least the last couple of years, Azeri President Ilham Aliyev and some of his ministers have engaged in a loud-mouth, trash-talking contest with Armenia. Earlier this month, a spokesman for the Azerbaijan Ministry of Defense said that ultimately his country would "meet the expectations of the people, the government, and the supreme commander-in- chief and will liberate the occupied land from the enemy." Here is a collection of such statements from both sides. In a piece this month, the New York Times' Ellen Barry said she found an antsy, pro-war mood in Baku.
Azerbaijan has spent the last several years rearming, spending more than the entire national budget of Armenia on its military. Thomas de Waal of Carnegie has written compellingly of the chance that one side or the other could miscalculate and trigger a resumption of combat. Seventeen years after the initiation of the current ceasefire, it is at least conceivable that time has softened Aliyev's memory of the mauling that Azerbaijan's soldiers suffered. It is also in the range of possibilities that Armenian President Serge Sarkissian could perceive the imminence of an Azerbaijan attack, and decided to pre-empt.
In either case, global oil prices would run amok. Considering what happened last time, I also personally think that Azerbaijan could be overrun. De Waal says the outcome locally would be a "catastrophe."
In the talks tomorrow, I was told by diplomats that both sides are likelier than ever to close an initial deal, which would lead to a much longer period of talks. Friends tell me to temper the optimism. It is worth listening to them if only to be braced.
AFP / Getty Images
Russian election clues? A couple of weeks ago, I ventured a bet that, contrary to the conventional wisdom, Russian President Dmitry Medvedev will run and win re-election in next year's elections; his mentor, Prime Minister Vladimir Putin, will opt to keep his protégé in place, I wrote. While for a variety of reasons I still think that is the case, it's understandable why many think otherwise: Putin is throwing up a lot of conflicting signals. Take his decision to eradicate much-hated and bribe-laden car inspections for the remainder of the year, worth up to $300, writes Will Englund at the Washington Post. And what about Putin's announcement of a $285 billion program to rebuild Russia's ramshackle roads, another bane of the country (that's Moscow traffic pictured above)? Is Putin announcing such programs from a simple sense of good governance? According to Robert Coalson of RFE-RL, the way Russia's strongman is presiding over the affairs of the ruling United Russia party, he is sending "the strongest signals yet that he intends to return to the presidency in 2012."
This is entertaining -- and convincing -- to be sure. But that's the point. Putin doesn't need to convince anyone -- all of Russia and the rest of the world know that the job of president is his for the taking. So why the show? Because he wants the accolades, the hero-worship, the pleading crowds and so on, but while pushing matters to the brink, in the end he will, for the good of the nation of course, step aside (technically, that is) and maintain the status quo. The system works the way it is. Ask yourself this question: why in the last month (as the Moscow Times rounds up in an editorial) have the killers of Stanislav Markelov been imprisoned; has imprisoned oligarch Mikhail Khodorkovsky, while not released, been permitted a fair hearing on state-run NTV television while announcing a decision to appeal; and has the alleged triggerman of murdered journalist Anna Politkovskaya been captured and charged? Is it because Medvedev is acting against Putin's wishes?
This is where it's possible to lose one's way. What seems dissonant in the tandem in fact isn't. It happens because Putin wants the balance that Medvedev provides. Not incidentally, Medvedev is content with this state of affairs as well. One way to understand Medvedev is as simply another expression of Putin -- that is, even if Putin stepped completely out of the picture, Medvedev would not turn Russia into bastion of liberalness. Rather, when Medvedev's Russia undoes some of the injustices in the country, "what might appear to be the dismantling of Putin's legacy is not a dismantling at all," the Moscow Times editorial board writes. It said:
Khodorkovsky, even if given parole for good behavior, will not be acquitted. Investigators might have found Politkovskaya's killer, but we are unlikely to ever know who ordered the murder. Ultra-nationalism is still not being fought outside the courtroom. And thousands of other murky cases -- such as the death of lawyer Sergei Magnitsky or the beating of Kommersant reporter Oleg Kashin -- have not been properly investigated. Most important, the power vertical, along with its creator, is as strong as ever. Medvedev may stay in the Kremlin without tackling these issues. But if a handful of high-profile cases is all that he has to offer in terms of political reforms, his second term in office will differ little from Putin's policy of status quo. A second Medvedev term might then be best described as 'modernized stagnation.'
Viktor Drachev AFP/Getty Images
Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.