Waters are boiling in the Black Sea. After weeks of tumult focused in the Ukrainian capital, Kyiv, tensions are now lathering in the Crimean Peninsula, where a stand off between Ukrainian and Russian forces is threatening the onset of "Cold War 2.0".
As a result, stocks in the West have plummeted, the Chicago Board Options Exchange Market Volatility Index rose 14 per cent and the rouble hit an all-time low against both the dollar and the euro.
Crimea, which dropped its "the" in the mid 1900s, has long been considered the "Jewel In Two Crowns", a 26,200 km² gem jutting into the Black Sea, bordering the Sea of Azov and sitting on the heads of both the Ukraine and the Russian Federation.
With a population just shy of two million, Crimea was part of Russia until ceded by Khrushchev in 1954. Over the next 60 years, it has largely continued to identify with "Mother Russia" linguistically and politically, as well as relying on Russian energy and the Russian market for its economic subsistence.
As covered previously, 25 per cent of the European Union’s natural gas comes from Russia, and 80 per cent of that gas passes through seven Ukrainian pipelines. Perhaps of even more significance is the Ukraine’s importance to global food supply.
The Eastern European nation is the world’s sixth largest wheat exporter with 10 billion metric tonnes hitting the world grain market in 2013. The potential of disruption in the supply of this vital crop from "the breadbasket of Europe" prompted an over night price hike of 4.9 per cent.
As Moscow deploys 16,000 Russian troops to the region and its 25 ship-strong Black Sea Fleet remains on standby in the port of Sevastopol, the world awaits the next move, and to see which head the crown slips from….
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Tim Haðdar is the Editor In Chief at Oil & Gas IQ. Reach Him At Twitter Or OGIQ
