Is Cyprus a New Energy Battleground?

For those with bank accounts in the Mediterranean island of Cyprus, this past weekend was a disastrous one. In what is an unprecedented move in the Eurozone, Cyprus is planning to impose a tax on bank accounts as part of an agreement to be bailed out by the European Union.

Those who have under 100,000 euros in their accounts will be taxed 6.75%, while those above that figure will be taxed almost 10%.

Technically, the depositors do not lose the money, but would gain shares in banks guaranteed by future natural-gas revenues - not a very good guarantee at all, given how incompetent the Cyprus government has been to date.

People are outraged: wouldn't you be, if you were to lose 10% of all your bank savings because your government had to be bailed out by foreigners?

This tax would not only just hit the people of Cyprus, but also the tens of billions of dollars that Russian banks as well as businessmen (legal and illegal) have placed in the country over the past few decades. Though the tax has just been rejected in Cyprus' parliament, Russia and its leader Vladimir Putin are not pleased by this attempt by the European Union to take what is rightfully Russian - and they are determined to convert it into one of the greatest victories in their never-ending quest for energy supremacy.

Yesterday, Gazprom - the world's largest producer of natural gas - has offered to bail out the Bank of Cyprus in exchange for effective exclusive control of the gas reserves off the coast of the island. Despite the fact that Cyprus essentially produces no oil and gas, the offshore waters of Cyprus could contain up to 60 trillion cubic feet (TCF) of natural gas. In comparison, the natural-gas reserves of Texas are at roughly 90 TCF.

If Gazprom were to control this massive resource, combined with the fact that Russia is beginning to court Israel for its natural gas, Gazprom would become the preeminent player in the Middle East for natural gas... and further increase its stranglehold on European energy.

The government of Cyprus has initially rejected the offer, opting instead to work with the European Union and keep the natural gas to themselves, the Cypriot government could soon find themselves running away from more EU-mandated madness...

...and straight into Russian arms.

In the next few months, we will definitely see Cyprus become the battleground of the energy cold war that is going on between the East and the West.

For an investor, the expanding influence of Gazprom and the Russians present numerous fantastic opportunities, ones that we describe in-depth in our Casey Energy Report.

Don't be another victim of Putinization - let their energy wars become your profit today.

Source: Casey's Daily Dispatch

About the Author