We'll have more commentary coming soon on this, but it appears that President Dmitry Medvedev has greeted the historic election of Barack Obama with a telegram of congratulations ("I expect to develop a constructive dialogue with you on the basis of confidence and respect for each other's interests") while simultaneously issuing a direct threat with an announcement that he would deploy Iskander missiles to Russia's Kaliningrad region, which lies between Poland and the ex-Soviet republic of Lithuania on the Baltic Sea. He also used his state of the nation speech to again blame the United States for the war in the Caucasus and the global financial crisis. As Joe Biden predicted, the new president is immediately being tested even months before inauguration. As we predicted, Russia would be among the first to do it (although Israel also celebrated ...

Gazprom is slated to start drilling on the Venezuelan shelf this month, but back at home the economic crisis could stymie oil and gas production and development, delaying the Shtokman field project. China and Kazakhstan have signed a natural gas agreement, while China also signed on with Transneft to build and operate a crude pipeline from Skovorodino in Siberia to Daqing in China. Meanwhile, pipeline politics in the Caucasus involve a variety of plans to cut out Russia.

Apparently I missed quite the stinging attack against Henry Kissinger made by Foreign Minister Sergei Lavrov during his visit to CFR about a month ago. This is interesting to me because for the past six months or so Kissinger has been seen as the leading proponent in the U.S. foreign policy community for rapprochement with Russia, pushing a softer policy line. In a by-lined WaPo article along with George Shulz, Kissinger argued that "We believe that the fundamental interests of the United States, Europe and Russia are more aligned today -- or can be made so -- even in the wake of the Georgian crisis, than at any point in recent history. We must not waste that opportunity." Just a couple weeks earlier, Lavrov had this to say about Kissinger's understanding of events in the Caucasus:

by Edward Hugh: Barcelona"The Kazakh government is ready to step in,'' Kazakhstan's Prime Minister Karim Masimov said this morning in a telephone interview with Bloomberg "The Kazakh banking system with the support of the government and central bank will fulfill all obligations to international investors.....We have our own specific plan to survive without any external support....I don't think we need support from the International Monetary Fund or overseas.'' Well that is good news, so at least we know that one of the CIS and CEE economies won't be looking to the IMF for bail-out support in this crisis which is presently growing by the day. So Kazakstan, that country which is reputedly host to reserves of approximately 95% of the elements in the periodic table, with a population of around 15 million housed on a surface area greater than the whole of Western Europe, is going to be able to look after itself. But hang on a minute, just where is Kazakhstan, and just what have they been getting up to over there, and why the hell should I take Karim Masimov's word for it, when just about all the other Iceland Look-alike show contestants seem to be saying the same? After all, didn't those extermely bright and able young people over at RBC Capital Markets in Toronto say in a report only last week that, along with Latvia, the country's $100 billion oil-led economy is among the most vulnerable to the present global credit crisis and the skid-row economic trajectories that go with it simply because of its excessive reliance on short-term foreign borrowing. And isn't it the case that the cost of protecting Kazakhstan government debt against default has more than doubled this month - to over 1,000 basis points (or 10%), the level for borrowers that investors term ``distressed,'' according to CMA Datavision credit-default swap prices. Only Ukraine, which as we know is already seeking IMF support, is classified as being a bigger risk among European emerging-market governments. Surely all those highly dedicated, bright, and extremely able young people who are doing all that trading know what they are about, don't they?

TODAY: Russian soldiers get a raise and permission to fire; Georgian conflict shows its identity crisis; Russian officials balk over economic crisis; Venezuela buys more Russian tanks; Kremlin discusses missile defense for Syria; Russian and US leaders may extend nuclear arsenal treaty; and Russia's biggest mosque opens in Grozny. Amid a report about a plan to raise the salaries of Russian army officers, there are varying accounts of the number of Russian troops killed in an ambush in the North Caucasus region over the weekend. Meanwhile, there is no confusion concerning the directive given to police in South Ossetia, who have been ordered to meet any potential assault by Georgian forces with force. "We will not allow our people and our officers to be killed," said Acting South Ossetian Interior Minister Mikhail Mindzayev. Abkhazia, for its part, remains ensconced ...

From the Wall Street Journal: There is of course a long line of goons happy to take military, energy or economic handouts from the Kremlin, though the dramatic drop in oil prices and Russian stocks will limit its ability to buy people off. Mr. Lukashenko could well be holding out his support for cheaper natural gas. But Russia's erratic and aggressive behavior in the Caucasus has apparently given even him pause about its possible intentions against Belarus. In addition to Mr. Ortega, Russia did manage recognition by Hamas, Hezbollah and the Moldovan regions of Gaugazia and Trans-Dniester. But that is little solace for a Kremlin whose bigger goal in the war was to declare a Monroe-ski Doctrine for its "near abroad" and lead a new anti-American block. Fyodor Lukyanov, the editor of Russia in Global Affairs, summed up the strategy: "Our long effort to become part of the West is over. ...

Well, that sure was fast. Today for the first time since war broke out between the two countries, delegations from Russia and Georgia met at the United Nations in Geneva for peace talks aimed at resolving tensions. However, no sooner than the Russians and Georgians decided to meet for talks, they decided not to talk, and suspended the meetings. Perhaps neither side has all that much to gain politically at the current juncture while the United States crawls toward the November elections (indeed, they have been postponed until Nov. 18). Some people believe that the peace talks are just one of many stunts from Georgia in order to keep the international media spotlight pointed in their direction, but this doesn't reconcile with reports that it was the Russian delegation which stormed out of the Geneva summit. That makes sense. ...

Jack Ewing at BusinessWeek argues that Russia's deep ties in the German economy are inhibiting the government's response to war in the Caucasus and other international issues with Moscow: The swift return to cordial relations was recognition of just how intertwined the German and Russian economies have become. Manufacturing everything from luxury autos to machinery to food, some 4,600 German companies are active in Russia and 70,000 German jobs depend on business with the country. Germany is also Russia's largest trading partner, with $45 billion in two-way trade during the first six months of this year. Little wonder that the 25 German businesspeople who joined Merkel in St. Petersburg seemed anxious to forgive the events in Georgia and get back to doing deals with Russian partners. The biggest deal: an agreement allowing energy supplier E.ON (EONGn.DE) to acquire 25% of a huge Siberian ...

Remember how we posted that Nezavisimaya Gazeta translation which reported on a big shift in attitude among some groups within the Kremlin to forge better relations with the West? Remember when Alexander Lebedev openly complained about Putin's childish Cold War games costing him 60% of his net worth? Or any other comment by Russia's titans of finance pointing out that the war in Georgia has completely scared away foreign investment? Well, it looks like President Dmitry Medvedev is trying to change his tune in order to lure back business and start repairing relations with the West - by focusing on his earlier crusade against corruption. If he's at all successful in any of these plans, that would of course be a great thing. But for now, it's just talk. From the Moscow Times: Speaking at the first meeting of the Anti-Corruption Council, ...

Azerbaijan is sticking to plans to reduce oil exports to the EU and increase shipments to Russia and Iran, as the South Caucasus country - home to another Russia-influenced frozen conflict in Nagorno-Karabakh - seeks to spread risk; There is continued speculation that Robert Dudley would quit BP by year’s end mounted as he was set to attend his last board meeting as chief of TNK-BP, BP’s Russian joint venture; PM Putin stated that Igor Sechin, deputy prime minister of Russia, will head the governmental commission for the development of power generation; Sechin added to journalists that Oil companies are prepared to supply diesel fuel and fuel oil to power plants at fixed prices.