Oil Troubles From a Politically Unstable Country (That's Not In the Middle East)

http://money.cnn.com/2007/06/01/news/inter...sion=2007060118

On Friday, reports said Russia may cancel a contract it has with BP to develop a huge natural gas field in the middle of the country, claiming BP wasn't producing enough gas at the project.

This would be the latest in a string of incidents generally interpreted as Russia strong-arming its partners into deals more favorable to the government. These moves, analysts say, could hurt worldwide production and drive up energy costs for consumers everywhere.

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"What's become somewhat apparent over the years is this idea that what's good for world markets isn't necessarily good for Russia," said Neff. "The fact of the matter is the Russians want to control foreign investment, and aren't nearly as concerned with X amount of oil coming from Russia to meet U.S. demand."

That dynamic, Neff says, is something Westerners should get used to.

"More and more oil is going to come from politically unstable countries," he said. "Either accept the fears and deal with it, or do something to limit demand."