Originally posted by Dayuhan:
Given the supply/demand equation in energy markets these days, anyone with oil and gas to sell is going to find a buyer.
Not sure I'd agree with that. There's quite a number of oil tankers out there being used as floating storage for oil. And a fair amount of it is of Iranian origin. Don't have current numbers, but does not look like it is decreasing. I'm sure it will change at some point, but I'd bet it's going to take longer than most people think.

Originally posted by Dayuhan:
Given the oft-demonstrated Russian inclination to use energy supplies for diplomatic leverage, nobody will want to be dependent on them
Very true - and quite understandable. But from the other side of the ledger, currently China is substantially dependent upon ME oil, and much of that from Iran. Every time Iran creates a stir in the Persian Gulf, the PRC is on the hook as one of the elders, trying to keep the kids under control, and getting them back to playing nice with each other. The reality is, your comment above sums up perfectly the exact situation the China is in right now regarding Iran (substitute "Iranian" for "Russian").

They got to play the role, because it's all about their (China's) economy - but it's got to get old really quick. Got to keep the oil flowing. So, they get out from under the current situation by diversifing their suppliers.

And when the ESPO pipeline project will eventually (Stage 3) get to 1.6 mil Bbl. per day with direct port access to both the Sea of Japan and land access to the Chinese border, well, that means that China, Japan, and South Korea all have substantially diversified their petroleum supply, with the ME being the biggest loser.

Doing this also gives China, and especially Russia, a substantive change in their relationship with Iran. It almost seems like the Iranians seem to enjoy being able to use both China and/or Russia as their foil in their dealings with the West. Now, I'd bet that there's been more than a few times where both the Russians and the Chinese have enjoyed that, but it's "up to a point". The concept of being pushed into being a player in situations created by Mahmoud Ahmadinejad is not likely to be particularly comforting to either the Russian or Chinese governments.

Thoughts?