President Obama and the leaders of France and Britain have deliberately raised the stakes in the confrontation over Iran's nuclear programme by dramatising the disclosure that it is building a second uranium enrichment plant. Their shoulder-to-shoulder statements of resolve, less than a week before Iran opens talks with six major powers in Geneva, raised more questions than they answer.

It turns out that the United States has known for a long time (how long?) that Iran had been building the still incomplete plant near Qom. Did it share that intelligence with the U.N. nuclear watchdog, and if not, why not? Why did it wait until now, in the middle of a G20 summit in Pittsburgh, to make the announcement -- after Iran had notified the International Atomic Energy Authority of the plant's existence on Monday, after Iranian President Mahmoud Ahmadinejad had delivered a defiant speech to the U.N. General Assembly on Wednesday and after the Security Council had adopted a unanimous resolution calling for an end to the spread of nuclear weapons on Thursday?

Is this all part of Obama's choreography to  build international pressure on Iran by getting Russia, in return for the dropping of plans to put a U.S. missile shield in Poland the Czech Republic, to threaten more sanctions against Tehran? A U.S. official says Obama shared the intelligence with Russian President Dimitry Medvedev at the United Nations this week and China had only just been informed. Did Obama try and fail to get Medvedev and Chinese President Hu Jintao -- both in Pittsburgh -- to join the three Western leaders on the podium? Or was his hand forced on timing by the fact that the New York Times had got wind of the Iranian nuclear plant and was set to publish the news on Friday?

The division of labour between Obama, Sarkozy and Brown was striking. The U.S. president sounded stern but his tone was measured. He stressed his commitment to dialogue and negotiation with Iran and to Tehran's right to peaceful nuclear energy. He did not mention sanctions, let alone the possibility of military action. It fell to the Europeans to inject a tone of menace.

Sarkozy accused Iran of defying the international community and taking the world on a dangerous path, and said that unless Tehran changed course by December, there would be tougher sanctions. Brown charged the Islamic Republic with deception and said the international community had no choice but "to draw a line in the sand", and that he did not rule out anything although sanctions were the preferred route. 

Will the latest disclosure on what Iran insists is a peaceful nuclear programme persuade Russia to renounce the sale of advanced S-300 anti-aircraft missiles to Tehran? Will it persuade China, which reaffirmed its scepticism about more sanctions this week and has begun supplying gasoline to Iran, to change its mind? The West sees Iran's dependency on imported fuel as a key vulnerability.

Friday's dramatic announcement was a clear effort to appeal to the world court of public opinion and maximise pressure on Tehran before the Oct. 1 talks, but there is no sign that the Islamic Republic's leaders are even considering yielding on their nuclear ambitions. On the contrary, they seem convinced that the nuclear standoff will enable them to patch over deep internal divisions over the disputed June presidential election by playing the patriotic card.

Back in 2008, even before Barack Obama was elected, Washington pundits were urging him to adopt a new regional approach to Afghanistan and Pakistan involving Russia, India, China, Saudi Arabia and even Iran. The basic argument was that more troops alone would not solve the problems, and that the new U.S administration needed to subsume other foreign policy goals to the interests of winning a regional consensus on stabilising Afghanistan.

It would be simplistic to suggest that the Obama administration's decision to cancel plans to build a missile-shield in eastern Europe was motivated purely -- or even primarily -- by a need to seek Russian help in Afghanistan. But it certainly serves as a powerful reminder about how far that need to seek a "grand bargain" on Afghanistan may be reshaping and influencing policy decisions around the world.

"Securing Afghanistan and its region will require an international presence for many years, but only a regional diplomatic initiative that creates a consensus to place stabilizing Afghanistan ahead of other objectives could make a long-term international deployment possible," Barnett Rubin and Ahmed Rashid argued in their much-cited 2008 policy paper titled "From Great Game to Grand Bargain". (pdf document).

Many of those arguments reappeared in a more recent report by the Asia Society (pdf document) -- formerly chaired by U.S special envoy to Afghanistan Richard Holbrooke -- so they are worth studying closely.

The ideas were ambitious and far-reaching, from remapping relations between Russia and the United States, prodding India and Pakistan towards a peace deal on Kashmir, seeking help from Iran and drawing in China and Saudi Arabia.  Some of those ideas were blown off course by the financial crisis, by the row in Iran over its disputed election, and by last November's attack on Mumbai which undermined U.S. attempts to steer India and Pakistan towards a peace deal.

And recently, they had been almost completely drowned by the media focus on military tactics and the merits of sending more troops to Afghanistan. With the U.S. decision to cancel the missile shield, one of those ideas -- about seeking Russian help in Afghanistan -- may have finally managed to break above the surface again.

In the case of Russia, the question was always about what price the United States was willing to pay to win Moscow's help in Afghanistan, possibly through less ardent support for NATO aspirants Ukraine and Georgia and a review of the missile shield due to be set up in the Czech Republic and Poland.

Obama already moved to try to assuage fears in Moscow and elsewhere that the United States might be seeking a permanent military presence in Afghanistan, a long-standing concern in Russia wary of having U.S. troops in what it sees as its backyard. “Make no mistake: we do not want to keep our troops in Afghanistan. We seek no military bases there," Obama said in his speech in Cairo in June. 

But it has been unclear how much further he might be willing to compromise to win Russia's support for what has become widely known as "Obama's war" in Afghanistan.

As discussed in this post, the Moscow Times spelled out what it saw as the price of Russian cooperation in Afghanistan in an op-ed published before Obama's inauguration:

“Afghanistan may well define your foreign policy legacy the way Iraq defined Bush’s," it said. "You will need all the support you can muster, including from Iran. You will also need Russia’s support. Moscow understands that the stability of its southern flank will hugely depend on what happens on the Hindu Kush mountain range in eastern Afghanistan and northwestern Pakistan. But Moscow is torn between giving support to the West and preparing for the West’s withdrawal from Afghanistan. The latter would mean cutting deals with the Taliban locally and relying on China strategically. You can help Russia make the right choice.”

Of course, there are many other reasons for, and consequences of, the U.S. decision on the missile shield, as discussed here and here.

But if anyone wants a steer on the likely direction of U.S. foreign policy, and its implications globally, it's probably worth rereading Barnett Rubin's "grand bargain" proposal from last year. Diplomacy is the art of the possible, and nobody expects the recommendations to be followed to the letter. But with Obama a considerably more cerebral president than his predecessor, the old "Read my Lips" slogan probably needs to be replaced with a new one: "Read the pdf."

(You can also find regular updates on the progress in relations between India and Pakistan -- one of the key themes of that report -- on "Pakistan:Now or Never", most recently in this post)

(Reuters photos: Girl in Afghanistan; Holbrooke, Obama)

After just six weeks as NATO secretary-general, Anders Fogh Rasmussen has his first crisis. The alliance may be slowly bleeding in an intractable war in Afghanistan, but the immediate cause is the U.S. administration's decision to shelve a planned missile shield due to have been built in Poland and the Czech Republic.

The shield, energetically promoted by former President George W. Bush, was designed to intercept a small number of missiles fired by Iran or some other "rogue state". But Russia saw it as a threat to its own nuclear deterrent and NATO's new east European members saw it as a useful deterrent against Russian bullying, by putting U.S. strategic assets on their soil.

President Barack Obama's decision to drop plans to install it on Polish and Czech territory leaves those former Soviet satellites feeling betrayed -- because they expended political capital to win parliamentary support -- and more exposed to a resurgent Russia, especially after its use of force against Georgia last year.

Obama's move is clearly part of a warming of U.S. relations with Moscow from which Washington hopes to gain help in return on supply routes to Afghanistan, pressure on Iran to rein in its nuclear programme, and an agreement on radical cuts in nuclear arsenals. But this "reset" of U.S.-Russian relations has only exacerbated the rift within NATO over Russia.

The three Baltic states and Poland were particularly critical of NATO's low-key response to Moscow's military action in Georgia. Some said the refusal of west European allies led by Germany and France to agree at a NATO summit last year to putting Georgia and Ukraine on a path to NATO membership emboldened the Kremlin to act. President Dimitry Medvedev's harsh attack on Ukraine's leader in an open letter last month fanned their fears of Russian bullying of its neighbours.

East European officials cite Moscow's playing with the gas taps and trade disputes, and its apparent determination to keep its Black Sea fleet in the Crimean port of Odessa Sevastopol beyond a 2017 deadline agreed with Ukraine as part of a strategy of tension intended to reverse the "colour revolutions" in Kiev and Tbilisi, and bring other former Soviet republics to heel.

All that makes it a particularly awkward moment for Rasmussen to deliver his inaugural keynote speech on NATO-Russia relations on Friday in Brussels. The former Danish prime minister has put a few noses out of joint in his first weeks by making clear he intends to run NATO in a more results-oriented way, leaving less room and time for ambassadors in the North Atlantic Council to debate any idea to a standstill. He has set strict time-limits on council meetings, streamlined flabby agendas and outsourced the drafting of a new Strategic Concept to a group of 12 experts led by former U.S. Secretary of State Madeleine Albright, on which not all allies are represented.

His personal management style and high media profile (monthly news conferences, a blog and Twitter chatter) has sharpened the traditional Kabuki dance in which a new boss and the old board flex their muscles at each other in mutual suspicion, insiders say. It is the first time a former prime minister, used to running a government and to talking to fellow national leaders, has been picked for the job. Previous secretaries-general were former defence or foreign ministers, more accustomed to being servants of the member nations.

Both camps within NATO (which privately brand each other the "Friends of Russia", and the "Cold Warriors") will be watching every word of Rasmussen's Russia speech to ensure he does not depart from alliance policy. The fact is that NATO has been unable to agree on an overall policy towards Russia since the 1990s, when it declared that Moscow was no longer an adversary.

Rasmussen hopes to launch NATO's own modest "reset" of ties with Russia, offering closer cooperation on Afghanistan, a joint threat assessment and work on non-proliferation of nuclear weapons. NATO officials have received assurances that Moscow will respond positively and breathe new life into the NATO-Russia Council.

None of that will assuage NATO's east European members, who are likely to press harder now for practical steps to give credibility to the alliance's Article V mutual defence commitment. That could involve drafting military plans to reinforce the Baltic republics and Poland, and holding joint military exercises on those countries' territory. The French and Germans have resisted such ideas in the past as unnecessarily provocative to Moscow. If NATO cannot agree to such moves, the United States may have to do more on its own to compensate its jilted friends.

(note: corrects Odessa to Sevastopol in 6th paragraph)

President Dmitry Medvedev’s conference on the modern state and global security this week was an object lesson in efficiency and organisation. Four hours north east of Moscow in the ancient city of Yaroslavl, security was tight but not overbearing, hundreds of Moscow and Saint Petersburg students guided guests to their hotels and waited tables with exquisite fish, caviar, pastries, vegetables and fruit in a marquee beside the conference hall.

Russia was showing the face of a modern state with a global role.

Escaping the speeches for a view of Yaroslavl’s medieval Kremlin and onion-domed churches and monasteries, a few of us set off down the road from the conference centre in search of a taxi to drive us into town. The modern conference grounds quickly gave way to small wooden kiosks selling ‘products’, ‘vegetables’ - no brand names here.

No taxi either but there was a kiosk selling water melons, run by an Azeri eager to earn some extra cash.

His Lada stank of petrol and exhaust fumes belched inside the car every time it pulled away from every junction. He told us police sometimes stopped him because of his dark colouring - in this part of northern Russia blonde is the order of the day. And he complained that his invalid allowance - he had kidney problems - barely covered the cost of his medicine.

Bumping into the centre of Yaroslavl, the Volga stretched before us, we saw a harbour packed with millionaire’s boats. Out of the car and walking through the ancient gates of the Kremlin, we were greeted by an old woman sitting on a wooden chair.

Can the real Russia please step forward?

The debate still rages over which side came out of the August 7-12, 2008 war better.

It’s true that Russia crushed Georgia’s army when it stepped in to help South Ossetian rebels but its forceful reaction to the Georgian attempt to retake rebel held areas scared its European partners and isolated the country. Only Nicaragua followed Moscow and recognised both South Ossetia and another breakaway region Abkhazia as independent states after the war.

And despite an overwhelming military victory, the war also showed up technological and organisational deficiencies in Russia’s army.

For Georgia, the unsuccessful war dented its reputation as a reliable and steady ally for the West in the notoriously unstable South Caucasus. It also slowed President Mikheil Saakashvili’s NATO ambitions and undermined his popularity at home.

Both countries present starkly different versions of the war and who started it. A commission headed by a Swiss diplomat hopes to provide some answers later this year.

In the meantime the peace remains fragile, an estimated 30,000 displaced Georgians still live in temporary accommodation and relatives of those killed — Georgians, South Ossetians and Russians — will mark the anniversary.

Click for more stories on the Georgia-Russia 2008 war from Reuters AlertNet.

David L. Stern covers the former Soviet Union and the Black Sea region for GlobalPost, where this article originally ran.

KIEV, Ukraine  — Was Kyrgyzstan’s decision last week not to evict American forces from a strategic air base the result of the “Obama Effect” — President Barack Obama’s reputed benign influence on how other nations now view the United States — or evidence of the new president’s hardball negotiating tactics?

The answer holds implications for the American leader’s first meeting with Dmitry Medvedev, the Russian president, when he is in Moscow July 6 to 8. Depending on whether the Kyrgyz reversal was made with or without the Kremlin’s blessing, the base issue could be a sign of how U.S.-Russian relations will develop over the next four years.

Bishkek announced that an arrangement was reached last week to allow U.S. forces to remain at Manas air base, where they staff a major re-fueling and transport hub for operations in nearby Afghanistan. Parliament, in which all but a few seats are occupied by President Kurmanbek Bakiyev’s ruling party, quickly ratified the new agreement.

Rumors of a deal had been swirling around Washington and Bishkek for more than a month, but U.S. and Kyrgyz officials maintained a strict silence that allowed no official confirmation of the back-channel negotiations. Only three weeks ago, Foreign Minister Kadyrbek Sarbayev said that the decision to eject the Americans by August still stood.

Under the new agreement, Washington’s annual rent for using Manas will be upped from $17.5 million to $60 million. In addition, the U.S. will pay some $36 million to renovate Manas International Airport, where the base is located, just outside the capital, and tens of millions more to combat drug trafficking and terrorism, and to promote economic growth. Some news reports placed the total amount of the new package at about $180 million per year. When the U.S. first opened Manas in 2001, its rent was just $2 million.

It is still unclear, however, if the base’s core functions will in any way change. A Russian foreign ministry statement indicated that cargo through Kyrgyzstan would be limited to “non-lethal” goods. Kyrgyz and U.S. officials made no mention of this, however.

Last year more than 6,300 flights took off from the base, while some 189,000 troops passed through and more than 200 million pounds of fuel were used.

But a question remains: Namely, were the Russians aware of the negotiations, or were they kept out of the loop?

The Kremlin appeared to have a vested interest in Bishkek’s original action. President Bakiev made his announcement that he was evicting the Americans just after talks in Moscow where the Russians had promised the Kyrgyz some $2 billion in aid. Many observers believed Russia, which runs an air base of its own in Kyrgyzstan, used financial enticements to achieve its long-stated goal of closing Manas, though both sides denied this.

Moscow immediately put a positive spin on the U-turn. President Medvedev said that he welcomed the decision, while the Russian foreign ministry said Kyrgyzstan was acting in its rights as a “sovereign nation.”

Not everybody was so sanguine, however. An unnamed senior Russian diplomat told Russia’s Kommersant newspaper that the Kyrgyz had played a “dirty trick” and Moscow would carry out an “adequate response.”

Konstantin Zatulin, a Duma deputy with close ties to the Kremlin and foreign policy establishment, nevertheless believes that Moscow did give its blessing to the negotiations. “Obama’s arrival played a substantive, important role <in the Kremlin’s position>. He created the ground for a new Russian-American relationship.”

Others do not doubt that some Russian officials are dissatisfied, but in the end their opinions matter little. “We have only two ‘senior diplomats’ — Putin and Medvedev,” said Aleksei Malashenko, a Eurasia expert at the Carnegie Center in Moscow, referring to Russian Prime Minister Vladimir Putin.

If the Russians were on board, some experts wonder if they received anything for their acquiescence — an American concession to abandon an anti-missile defense shield in Eastern Europe, for example. This, however, would be a risky move, as it could be interpreted as a betrayal of the two countries that pushed for the shield, Poland and the Czech Republic.

But others say that the Russians were in fact not informed until the last minute. This raises the question of what measures they will take next. Just prior to the decision to kick the Americans out, Kyrgyzstan experienced a debilitating cyber-attack which some experts subscribed to the Kremlin.

On the other hand, the Americans may have simply handed the Russians a fait accompli, which Moscow, on the eve of its first summit with the new president, will have to accept.

“My sense is that they are as mad as hell,” said Stephen Blank, a professor of national securities studies at the U.S. Army War College. “They thought they had it locked up and we beat them.”

For full article on GlobalPost, click here.

There is little doubt that the BRICs -- Brazil, Russia, India and China -- have become big players in Africa. According to Standard Bank of South Africa, BRIC trade with the continent has snowballed from just $16 billion in 2000 to $157 billion last year. That is a 33 percent compounded annual growth rate.

What is behind this? At one level, the BRICs, as they grow, are clearly recognising commercial and strategic opportunities in Africa. But Standard Bank reckons other, more individual, drivers are also at play.

In a new report, the bank looks at what each of the individual BRIC countries is trying to do. To whit:

-- Brazil's immediate intererest in Africa is securing access to natural resources, particularly oil. But is also motivated by a desire to create a new "Southern Axis" with itself at the forefront.

-- Russia is also interested in Africa's natural resources. But it faces a problem because of the sullied reputation of the Soviet Union during the Cold War. So Moscow has also embarked on a rebranding programme within the continent by ramping up its aid programmes.

-- India is attracted to Africa in part because of long historic ties. Commercial engagement, however, is also motivated by a need to guarantee the natural resources it needs for its own growth. Furthermore Africa is seen politically as a key ally in the pursuit of a competitive advantage over its Asian competitor China.

-- For China, Africa provides a long-term partner in its ongoing bid to gain global economic ascendancy, providing it with the resources, markets, geopolitical support, and, eventually, food and social security in the form of a growing and engaging diaspora.

A full copy of Standard Bank's report, which was written by Simon Freemantle and Jeremy Stevens, can be found here.

(Photo: Jeremy Gaunt)

While Indian Prime Minister Manmohan Singh's meeting with Pakistani President Asif Ali Zardari in Russia captured all the attention,  Singh's talks with Chinese President Hu Jintao may turn out to be just as important in easing off renewed pressure on the complex relationship between the world's rising powers.

India said this month it will bolster its defences on the unsettled China border, deploying up to 50,000 troops and its most latest Su-30 fighter aircraft at a base in the northeast.

While upgrading the defences has been a long-running objective, the timing seemed to suggest New Delhi's renewed fears of "strategic encirclement" by China by deepening ties with all of its neighbours, not just Pakistan but also Sri Lanka and Nepal.

The chief of the Indian air force, reflecting the anxieties in the security establishment, said China was a far bigger threat than Pakistan because so little was known about Beijing's combat capabilities.

Predictably enough, the Indian military moves and statements drew a strong response from China's official media warning that New Delhi's tough new posture was dangerous if it thought it would compel China to cave in. Beijing was in a different league, both in terms of national power, economic scale and global influence, the media said.

On Monday, Hu and Singh met on the sidelines of the Shanghai Cooperation Organisation and the BRIC meeting that followed in the Urals city of Yekaterinburg. Details from the meeting were sketchy, but the Press Trust of India said the two leaders supported an early meeting of a joint economic group to push trade ties. 

They also touched on the border dispute at the heart of the more than four decades of distrust, noting that top negotiators were due to meet in August. The People's Daily said Hu stressed on expanding economic cooperation and investment flows and aims to take bilateral trade to $60 billion in 2010. It stood at $51.8 billion in 2008, the paper said.

India's decision to attend the SCO, where it has observer status, was also a step forward. Since its inception the forum has been seen in India as China-centric with the main strategic objective of limiting U.S. dominance on China's periphery and in that way prevent the hemming-in of both China and Russia.

By attending the summit is New Dehi signalling its intention to engage China on a broad front and not shy away?

And did Beijing shift ground a bit by acceding to the declaration by the BRIC - Brazil, Russia, India and China - calling for U.N. reform and saying that the grouping understood and supported India and Brazil's aspirations to play a greater role in the United Nations.

Both Brazil and India are candidates for permanent members of the Security Council and Beijing has long been cold to the idea of at least its southern neighbour getting a place on the high table. It wasn't a ringing endorsement at Yekaterinburg but perhaps the first shuffling of chairs?

[Manmohan Singh and Hu Jintao at the SCO summit and a Chinese soldier at the border]

This is one in a series of post cards from Reuters reporters across Europe, Middle East and Africa.

Who rules the world’s biggest energy producer? That’s the question that is bugging many people in Russia as the country’s two leaders – PM Vladimir Putin and President Dmitry Medvedev — try to cope with the worst economic crisis since the 1998 domestic debt default.

Many believe Putin, a former KGB spy, is still the boss despite handing over power to Medvedev last year. But boss of what? The economy forecast to contract this year and Moscow is facing tumbling budget revenues as the income from oil, gas and metals exports dries up.

The Kremlin says it is concentrating on avoiding social tensions but the country’s richest men – the oligarchs – also say they need state bailouts. Russia’s richest man has been forced to open restructuring talks with Western creditors and more are likely to follow.

Russian debt and equity markets have rallied this year as bottom feeders snap up what they say are bargains of the decade. Sovereign yield spreads have narrowed. But friends in major companies report tumbling demand across the board – from shampoo to cars. The banking system has stopped giving out credit, job losses are soaring and the property market is paralysed with fear.

The smartest people in Moscow expect this to be a deep, long Russian crisis that will send prices down far further. The question is how the ruling duo of Putin and Medvedev handle the crisis; or rather, what happens if they fail to.

(Communists line up at Vladimir Lenin’s mausoleum to pay their respects to the Soviet state founder on his birthday in the Red Square in Moscow April 22, 2009. REUTERS/Denis Sinyakov (RUSSIA POLITICS))

Could an Austrian oil and gas group with more than 41,000 employees, some 25.5 billion euros turnover and a presence in more than 20 countries actually be a secret front for Russian gas giants, extending their tentacles of power into Europe?

It could be if you believe Zsolt Hernadi, the chairman of Hungarian rival MOL, not to mention some scary headlines about Russian gas in the British press.

Earlier this week Austria’s OMV sold a 21 percent stake it held in MOL to Russian oil group Surgutneftegaz for 1.4 billion euros ($1.9 billion), double the amount the stake was worth as stock. The stake was originally bought from … a Russian family Almost half of the stake was originally bought from … a Russian family.

“Suspicion arises … that because the Russian investor bought this stake at exactly the (initial purchase) price, it (OMV) was just a front,” Hernadi told a Hungarian parliament committee.

The sale came just days after OMV’s chief executive said he did not plan to let go of the stake this year, fuelling speculation there was an ulterior motive behind the swift deal, finalised in the middle of the night on Sunday.

“Sometimes the markets offer opportunities you have to take,” OMV’s spokesman said. The sale also came after a miserable takeover attempt by OMV, which was repelled by the Hungarian group at every twist and turn.

The European Commission warned on the deal last year, saying it could create big competition problems and lead to higher prices. OMV eventually withdrew its $23 billion bid. Unofficial talk among EU officials has also highlighted worries about OMV’s Russian connections.

But doesn’t selling the stake just make good business sense? And if OMV is a Russian lapdog, why is it spearheading a consortium for the Nabucco pipeline, a project aimed at diversifying European supplies of gas away from Russia?

Well, Russia’s hold on energy supplies is an ever-sensitive issue. A spat with Ukraine over payments escalated into a two-week supply shutdown earlier this year, hitting parts of Europe and underlining reliance on Russian gas.

So Russia and OMV-bashing gets some sympathetic ears, even if MOL’s Hernadi said in 2007 that his company would be better off in the hands of the Russian firms than OMV.

Russia, for its part, may not have been keen to see a consumer of its oil fall into hostile hands.

Surgut, believed to have around $19 billion sitting on its balance sheet as of September 2008, could probably afford to pay a healthy premium. Investors, who have begged the company for years to put its cash in play, rewarded it with a rise in its stock price.

OMV has been doing business with Russia’s Gazprom since 1968, describing the oil giant as a “reliable partner” even during the last gas row.

It has to toe a fine line. While it relies heavily on Russia for some of its big contracts and for developing a major gas hub, it is also keen to push the Nabucco project, emphasising all the while that the plans are not politicised and certainly not anti-Russian.

Nabucco’s managing director told me late last year that the consortium does not worry about where gas comes from, as long as the sources are diverse - Iran, even Russia, are possibilities, it is about pragmatism, not politics, he said.

Most analysts think of the MOL stake sale as purely pragmatic too, ignoring the politically-charged comments from Budapest. “The price is favourable as OMV has achieved close to a 100 percent premium to MOL’s share price at the close on Friday,” UBS analysts wrote in a research note. “The deal eases liquidity worries at OMV.”

But whether OMV is just pragmatic or secretly a Russian puppet, this is unlikely to be the last time it gets drawn into the politics of energy.