RIYADH, May 6: Energy issues are getting increasingly mired into the geo-strategic politics. Mind boggling moves, with possibly disastrous consequences, are being made on the global energy chessboard, all around. Politics and still more politics continue to keep dominating the energy issues – making them still more confusing and the challenge of keeping the global economy well oiled, still more daunting.

In the current rush to secure resources by major energy hungry nations, and exploiting those assets to its maximum advantage, from a producers’ point of view, competition rather than cooperation has acquired to be the order of the day.

As the Saudi Energy Minister Ali Al-Naimi was about to start a visit to Washington, as part of regular consultation between the world’s largest oil producer and the largest global oil consumer, a US Senate panel last week revoked the sovereign immunity of Opec’s members from US legal action.

This legislation, if at all adopted by the US Congress and also approved by the current Bush administration, could allow the US Justice Department to initiate suing Opec in the US courts – indeed if they desire – on charge of price fixing. The legislation would allow the US attorney general to sue oil producing members of the Opec. The legislation is apparently directed at domestic audience, yet, in a world beset with energy issues, the move, in the least, pollutes the overall atmosphere still more. And while this was being consumed by the energy fraternity, another ominous development appeared on the scene, as Russia threatened last to divert its oil riches to energy hungry Asia, ‘if Europe does not become more accommodating towards its efforts to expand to the West.’

For now, Putin’s threat is an empty one, since Russia does not have oil or gas pipelines connecting it to Asia and can only deliver limited supplies by rail. However, first steps have now been taken in that direction too. Last Friday construction work started on a 2,550-mile pipeline linking Siberian oilfields for the first time to China and the Pacific coast. Once completed, by 2009, the pipeline is expected to carry 1.6 million barrels of oil a day—some 30 million tons of oil a year—to China, Japan, South Korea and other Asian markets.

“When it’s coming to us, its investment and globalisation, and when we intend to arrive - it’s the expansion of Russian companies,” Mr Putin said. “We should agree on common rules of the game. “Indeed Mr Putin had a point!

The European Union is largely dependent on external sources, particularly Russia, but also Norway and Algeria, for its energy needs. Russia is a heavyweight in the arena. Its state-run gas giant Gazprom provides around one-fourth of the gas supply to Europe. Flush with cash, Gazprom now wants to enter the downstream European energy markets. And here lies the problem. Gazprom is now complaining loudly that its efforts are being constrained. West on the other hand, accuses Russia, too, of not opening up its own monopoly to foreign competition.

Russia, in the meantime, is playing its energy cards well, apparently in a bid to regain some of the lost glory of the USSR days. It is teaming up with other players in the market to increase and enhance its clout in the energy markets.

Recently it teamed up with Algeria, enhancing the collaboration between the two states in the energy sector: Algeria has the eighth largest proven natural gas reserves in the world. It accounted for one-fifth of natural gas imported into the EU in 2000, second only to Russia.

As per the deal, Russian companies have been given monopoly rights for oil production in the Sahara desert; Russia’s Gazprom would now be participating in the development and production of Algeria’s gas sector; and Algeria will share with Russia its sophisticated Western technologies in gas liquefaction.

With Algeria as Europe’s only viable alternative source of gas at present, the deal with Algeria provides Moscow with additional clout in the energy sector.

The increasing Russian clout is a cause of concern to some. International Energy Agency (IEA), the OECD energy watchdog, is warning Europe against relying too heavily on gas supplies from Russia. Its chief economist Fatih Birol told Financial Times Deutschland, “Europe must change its energy policy in order to avoid a dangerous dependence on Russian natural gas.” The latest comments from Moscow are, according to him, “an alarm signal and should open the eyes of European politicians.”