Warning Shots Fired At OSCE Mission In Crimea; Russia Warns Of Treaty Force Majeure Over "Unfriendly NATO Threats"

Tyler Durden's picture

Perhaps it is time to finally admit that anyone who thought Putin's Tuesday press conference, which the market so jubilantly assumed was a case of "blinking" and de-escalating tensions with the west, was wrong. If there is still any confusion, following yesterday's news that Gazprom officially threatened Ukraine with cutting off its gas supplies, as well as the storming of a Ukraine base by Russian troops - luckily with no shots fired so far - then today's developments should any remaining doubts. Moments ago AP reported that as the latest, third in a row, group of OSCE inspectors tried to enter Ukraine, they were not only barred from doing so, but warnings shots were fired to emphasize the point by pro-Russian forces.

From AP:

An Associated Press reporter says pro-Russian forces refused to let a foreign military mission enter Crimea on Saturday.


After the officers had stopped, the armed men fired warning bursts of automatic weapons fire into the air to make other unidentified vehicles halt. No injuries were reported.


The multinational group of military officers from the Organization for Security and Cooperation in Europe was attempting to enter the embattled peninsula from the north. The armed men told them they had no authorization to enter Crimea.


The OSCE mission will likely return to the Ukrainian city of Kherson where it had spent the night, the AP reporter said.


Russia and Ukraine are locked in a tense standoff over Crimea.

the OSCE tweeted:

Bloomberg adds:

OSCE tried to enter Crimea for third day, warning shots were fired as it attempted to do so today, Tatyana Baeva, OSCE spokeswoman, said by phone from Vienna.


Nobody injured in incident, OSCE mission is now back in Kherson, southern Ukraine.


OSCE 29 member states that provided people for Crimea mission may meet today or tomorrow in Vienna to discuss further action: Baeva

Then there was this overnight escalation as reported by Ukraine's TV5 station (of questionably credibility), via Bloomberg:

Pro-Russian armed men today captured building in Simferopol, capital city of Crimea, TV5 private news channel reports, citing Vladislav Selezniov, spokesman for Ukraine’s defense minister in Crimea.


Russian soldiers seized Ukraine’s state border guard division in Shcholkino near Kerch Strait, Ukraine’s border service says in statement on its website


Russian soldiers stormed Shcholkino unit last night, seized weapons storage, beat Ukrainian border guards, took away their mobile phones and forced them and their families to leave


Currently, 11 border guard units are being blocked: Ukraine border service says in separate statement


Ukraine denied entrance to 513 “extremists” from Russia during last 24 hrs, state border guard service says in another separate statement on its website

Remember, all it takes is for one stray bullet to hit a human target, on either side of the conflict, for the market to grasp just how wrong its assessment of de-escalation has been.

Elsewhere, while inspectors were trying to make their way into Ukraine - unsuccessfully - Russia announced it was considering a further freeze of U.S. military inspections under arms control treaties in retaliation to Washington's decision to halt military cooperation with Russia, news reports said Saturday.

Interfax blasted earlier:


AP has more:

Russian news agencies carried a statement by an unidentified Defense Ministry official saying that Moscow sees the U.S. move as a reason to suspend U.S. inspections in Russia in line with the 2010 New START treaty on cutting U.S. and Russian nuclear arsenals and the 2011 Vienna agreement that envisages mutual inspections of Russian and NATO military facilities as part of confidence-building measures.

A Defense Ministry spokesman wouldn't comment on the reports, which are a usual way in Russia to carry unofficial government signals.

The U.S. and the European Union have introduced sanctions over Russia in response to its move to send troops that have taken control of Ukraine's Black Sea peninsula of Crimea.

So if the START treaty is suspended how long until its anti-proliferation clauses are scrapped completely once more, and the Cold War arms race returns once again.

Also while escalations such as these threaten to transform the new Cold War into a Hot one, the clock is ticking, and in favor of Russia, because the longer Ukraine remains without western aid, the quicker its foreign reserves will run out, and the faster the country will become a vassal state of Gazpromia. Add the ticking countdown to the March 16 Crimean referendum, which the west and Ukraine have both declared illegitimate yet have no power to stop, and suddenly one can see how Putin once again outsmarted everything the west had to throw at it. WSJ explains:

Gazprom's demand raises the prospect that some of the aid Western powers have guaranteed could end up flowing into Moscow's coffers to pay Ukraine's gas bill. Virtually all of the country's natural-gas imports come from Russia. Late last year it was granted a discount that Moscow has threatened to rescind since the fall of Mr. Yanukovych.


"This now becomes an EU/U.S. problem: Who is going to lend Ukraine the money to pay the gas bill? If so, what will be the conditions?" said Jonathan Stern, an analyst at the Oxford Energy Institute.


A spokesman for Gazprom said that the threatened cutoff wouldn't affect supplies to Europe, which gets about a third of its gas from Russia, much of it via pipelines that run through Ukraine.



In 2009, after the Russian energy giant switched off the supply to Ukraine, Ukrainian authorities began using the supply transiting their territory that Gazprom said was destined for customers in Europe. Gazprom then cut off the flow altogether, causing shortages and price increases for end customers.


"The EU, U.S. and IMF have just about three weeks to resolve this," Mr. Stern said.

At which point it's game, set match Putin once more.

Finally, what certainly helped Putin is that, as expected, China took the side of Russia, not of the "free world", in what is now a very distinct and clear axis of power the New Normal dipolar world.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Looney's picture

...Gazprom then cut off the flow altogether, causing shortages and price increases for end customers.

This is still about the gas pipelines. The Qatari gas was supposed to go through Syria, Turkey, the Black Sea, CRIMEA, through Ukraine into Europe. I think Putin knew that we would not abandon our attempts to take Syria, so by pulling Crimea out of the equation he effectively puts the end to any future EU/US plans to build the Qatari pipeline through Syria. I think?  ;-)


AlaricBalth's picture

Cry ‘Havoc,’ and let slip the dogs of war

ThirdWorldDude's picture

Qatari pipelines can be rerouted to Bulgaria and Romania, then continue up north to Central Europe and beyond. 

Yes, a large chunk of what's going on in Ukraine is because of oil and natgas, though the lion share of it has geopolitical significance as "predicted" in Zbig's The Grand Chessboard.

Why now? Two (not mutually exclusive) reasons:

- Russia's rise from the ashes under Putin-Medvedev in the last 15 years is a direct threat to The Empire.

- Central Bankers need distraction from the "succesful recovery". What better way to polarize the masses than good old-fashioned nationalism that under CB's lead inevitably takes us toa war?

SWRichmond's picture

Elsewhere, while inspectors were trying to make their way into Ukraine - unsuccessfully - Russia announced it was considering a further freeze of U.S. military inspections under arms control treaties in retaliation to Washington's decision to halt military cooperation with Russia, news reports said Saturday.

If true, they would not do this unilaterally (without "backing") IMO.  This is getting larger.  Putin not backing down.

AlaricBalth's picture

And if you consider Russian Minister Lavrov's comments concerning sanctions against Russia will have a boomerang effect, the magnitude of the situation will become clearer under closer consideration of what he meant.

Exxon, BP, Royal Dutch Shell etc, all have interests and major investments in the region. It has been reported that BP lost $800 million practically overnight due to the Ukrainian crisis.

Exxon would be greatly impacted by a Russian in kind response to US sanction.
From Exxon's 2012 annual report:

ExxonMobil and Rosneft of Russia signed a Strategic Cooperation Agreement in 2011 to jointly participate in exploration and development activities in Russia, the United States and other parts of the world. In 2012 ExxonMobil and Rosneft signed a Pilot Development Agreement to evaluate the development of tight-oil reserves in western Siberia and signed an agreement to establish a joint Arctic Research Center.

And from Pipeline and Gas Journal:

The companies will set up a joint venture to run a pilot program and potential commercial production with equity interests of 51% for Rosneft and 49% for ExxonMobil. Work will be carried out at Rosneft’s 23 license blocks covering a total area more than 10,000 square kilometers.


Billions are at stake and the lines are quite blurred. This isn't about geo-political posturing, its the economics of energy resouces.

To quote from the film Network, "The world is a college of corporations, inexorably determined by the immutable by-laws of business."

Excellent scene in case you haven't seen it.

BaBaBouy's picture

It's The Ole ""MILITARY INDUSTRIAL COMPLEX"" Stupids... (Germany Included!)

""Mr. Putin, who has lamented the end of the Soviet empire, is using Russia’s energy riches to buy military technology overseas such as communications networks and drones. Germany, its eastern half once ruled by Stalinist countrymen, built for Russia a sophisticated training center for infantry units that can simulate an array of war scenarios, such as invading a neighbor.""

Read more: http://www.washingtontimes.com/news/2014/mar/6/putin-has-transformed-rus... Follow us: @washtimes on Twitter

derek_vineyard's picture

the stock market has gone so parabolic that rooting for war is not out of the qwuestion

The Big Ching-aso's picture

If Russia freezes Smirnoff Vodka exports what the hell am I gonna use for serving shitty cheap mimosas to my hungover guests?

layman_please's picture

pipelines? what about nat gas itself?

"Ukraine sits on 39 trillion cubic feet of natural gas reserves. That's about one-quarter the world's entire proven reserves. One company that has bet big on Ukraine's natural gas is US-based Chevron."



TerminalDebt's picture


Alberta has voted to separate from Canada and join the USA because all their oil is used in the US anyway.

US army has moved in to protect them and Canada and Russia have called the move illegal.



Quebec has voted to separate from Canada and nobody cares.

Headbanger's picture

And don't forget California will vote to become six states, Colorado will vote to become two states and Marta's Vineyard has joined Palau.

Headbanger's picture

This whole mess in the Ukraine and Syria is not about the "New Normal" you idiots!

It's all about getting back to the "Old Normal" so Russia and China will once again be cut off from the free world economies so their cheap labor and cheap resources stop devaluing Western labor and products!

It was the fall of the Soviet Union and the stupid failed mistake of helping China become a more modern nation that's been ruining US and European economies for over 20 years now.

The book "Blood in the Streets" predicted all this would happen in 1990.  So Western nations are now trying to politically and economically isolate Russia and China again.


layman_please's picture

wtf is 'free world economies


'... that's been ruining US and European economies for over 20 years now.' ???

so it's the 'communists' again? give me a break! look no further from US and EU if you want to find the real culprits who fucked you over to maximize their profits by exploiting eastern slave labor.

eurogold's picture

Smirnoff Vodka for sale in the EU is distilled in Italy. Total crap ! Russia should end this quickly by shutting off the Gas supply to the Ukraine.

GoinFawr's picture

A 'mimosa' without fizz is called a 'screwdriver'. But either are an important part of any Breakfast of Champions.

The Big Ching-aso's picture

Shhhhhh don't tell them. I pour in some Walmart club soda and they think they're still drinking last nite's champagne.

SilverRhino's picture

McCormick's   I keep a bottle of that in the back of the cabinet for guests that irritate me but not enough to get thrown out. 

Instant hangover gurantee.

USisCorrupt's picture

Why would Putin back down? He has all of them by the balls. China just started defaulting on the Corporate Bonds this last week, between China and Russia they are willing to crash the West Banking system for all it does now is to SUCK resources in exchange of electronic digits and paper and has NO BENEFIT to anyone, not even the slaves anymore. The world had woken UP!


BTW... I like the FACT that both China and now Russia has turned Positive on BitCoin once again. I am not saying that it is an immediate buy for those 118 Million sent to the exchange the other day has some worried on another push down, BUT I sure do like BitCoin in the long term vs the Dollar. Just buy 1 or 2, in the current forex market BitCoin is like a Grain of sand on a beach miles long. And its life expectancy is looking much better by the day.

chemystical's picture

"BUT I sure do like BitCoin in the long term vs the Dollar. Just buy 1 or 2."

I agree that the epitaph of the USD and other fiat is already written, but I see 2* problems with your statement:

1) the timing of their demise is still far from certain, and

2) when that demise occurs, how many people will say to their employers, "Ok, pay me in Btc!", and how many merchants will say the same?  That transition is not going to happen cleanly and painlessly, and a scenario that has Btc absolutely emerging on top is an unfounded one.

Btc has nothing going for it other than network, and it must be stated again and again, that it's a network of other people's assets, and those people can walk away at any time and switch to whatthefuckcoin at for all practical purposes zero cost.  When the coroners do pronounce fiat to be dead, it's going to be a rough transition for all, and Btc might suddenly look like just another pretty face amongst thousands of cc. 

Btc's value relative to those other pretty faces will level off, and in fact it already has if you care to look at how the other cc's trading ratios versus Btc has changed in the last 6 months.  There are just too many "me too's" out there (and infinitely more potentially), and some have technical advantages over Btc,  As the markets become more savy as to what constitutes value in that environments, those markets will tune in clearly to the other cc's sales pitch of "Why not me?" 

Meanwhile other potential currencies (backed by something other than kW and cards) will clamor for attention too, and in the tumultuous transition from fiat to ???, the hoi polloi will by their natures turn to the known quantities with which they've been familiar for all of their lives.  It the transition occurs in the next 10 years I wouldn't depend on cc emerging from that battle. 

So why not diversift into ltc, nmc, nvc, ppc, etc....kinda like diversifying into pets.com, webvan, kozmo.com, flooz.com, etoys.com, boo.com, mvp.com, go.com, kibu.com, whatthefuck.com?  Oh, wait.

* well, in truth there are far more than 2 problems with it.  The first glaring one is the "just buy 1 or 2 statment".  Why 1?  Why 2?  That's no small difference when you're talking from a diversification perspective.  What it sounds like is mindless lemming speculation.  Provide a basis for your position, and I might change my mind.

Optimusprime's picture

Right.   And now India has come down basically on the Russian side--huge development.  The governments of nearly half of mankind are not with the Ziocons.

Abi Normal's picture

"...as well as the storming of a Ukraine base by Russian troops - luckily with no shots fired so far - then today's developments should any remaining doubts..."

developments should ?????? any doubts...what is this, fill in the blanks day?  allay any doubts, remove any doubts...oh well, hate to even be associated with the grammar police, just call me Capt Obvious.

As to the situation, it is now warm, soon to turn hot, then all bets are off...bitchezzz!  We all know a false flag has been planted already, in Crimea, just a matter of time...tick tock...tick tock...

Caviar Emptor's picture

Please add this motive: the defense-industrial complex and war profiteers desperately need a reason to become important and rich again. US defense cuts are threatening to reduce the army to pre-WW2 levels

Groundhog Day's picture

Is that show Future Weapons still on the air

chemystical's picture

Whilst I agree with your sentiment, in all fairness you must assess Chuck Hegel's statements in their full contexts. 

Cuts to defense spending on hardware is not what he talked about.  He's talking mostly about cutting the number of flesh and blood soldiers. 

The MIC doesn't manufacture humans, and the amount that some companies earn from outfitting and feeding and housing them is a pittance compared to the hardware outlays.  The real MIC - the hardware division - will still be drenched in debt slave cash.

The Def Dept employs something on the order of 40,000 lawyers.  They are there to write and negotiate and renegotiate and litigate contracts with the hardware industry.  They are not there to fret about the boys and girls or the VA.

Groundhog Day's picture

Can't we just get back to who the ugly Kardashians are screwing and that out of control miley cyrus or beiber or...... 

StychoKiller's picture

Betcha you'd just luuv to be in "Pleasantville" right about now!

Wahooo's picture

It would be so much easier to back the US in this if we hadn't completely lost our moral stature, in fact are now underwater. So it's become a case of TPTB v. TPTB, and who the hell cares if they all die.

Lumberjack's picture

You might also want to re-visit the Trans Caspian Pipeline too. 




That will prove very interesting. Having followed things very closely over the last 15 years regarding renewable energy and the frauds/more serious side of things, I would want to bring this to your attention as well. It seems that certain entities have recieved hundreds of millions in EXPEDITED stimulus and other funds and one in particular, runs more shell and shelf LLC's etc. and has a network so vast and yet by design intentionally obfuscates what really is going on. Here is a summary that I used elsewhere originating from a State Governmental ageny in Maine that now has been eliminated that showed that CEO's profile. The main group, UPC Group/Management (First Wind/IVPC/UPC/Evergreen et.al.), has been basically banned in Russia and has other operations in hot zones worldwide including Xinjiang province in China which borders, (drum roll please), Russia. There is so much more but that will be it for now.  


Here is First Wind CEO resume: (Note Trans Caspian Pipeline).

The First Wind Executive Team

Paul J. Gaynor

Chief Executive Officer

Executive Summary

Paul J. Gaynor is responsible for the strategic direction and day-to-day management of First Wind projects in North America.

Career Highlights

Mr. Gaynor has more than 20 years of experience in the energy field, encompassing leadership and finance roles in the energy, power, and pipeline sectors. In addition, he has been engaged in several landmark energy and power financings across the globe.

Mr. Gaynor was formerly Chief Financial Officer of Noble Power Assets, LLC, a private equity-backed power acquisition company. Prior to that, he was the Senior Vice President and Chief Development Officer of Singapore Power Group (SP) and Chief Operating Officer of SP International (SPI).

Mr. Gaynor led a comprehensive restructuring of SP and oversaw project development and asset management at SPI. He joined SP as Senior Vice President and Chief Financial Officer, where he was responsible for all financial matters, including leading the initial public offering and introducing world-class finance practices into the organization.

From 1998 to 2000, Mr. Gaynor was the Senior Vice President and Chief Financial Officer of PSG International, a pipeline development company owned by GE Capital and Bechtel Enterprises. PSG developed, financed, built, owned, and operated gas, oil, and water pipeline systems across the globe. Mr. Gaynor assisted in the establishment of the company and oversaw financial matters. He was also responsible for acquiring a 32.5% interest in a natural gas system in Mexico and subsequently sat on the board of directors. In addition, he led the fundraising process for the $3 billion TransCaspian Gas Pipeline project in Central Asia.

Before PSG, Mr. Gaynor was Vice President and Manager of Asia Pacific operations for GE Capital’s Structured Finance Group (SFG). He was responsible for deal analysis, execution, and internal approvals, leading a team that evaluated over 20 power projects between 1994 and 1998. Mr. Gaynor also led the Group’s $400 million investment in Paiton Energy and Quezon Power, and he received internal approval for over $1 billion of projects. He also worked at GE Capital SFG in the U.S. before moving to Asia, and he sold power plants for GE Power Systems prior to attending business school. -------


Here is the link that no longer works but I can assure you hardcopy etc. is out there. He also worked for...Enron in London...


Crash Overide's picture

I don't think anyone knows what's going on in Ukraine, remember we are the useless eaters and the elite's are always playing different games.

I don't believe anything anymore.

Abi Normal's picture

All to familiar and true, Alaric! Alarming as hell, prepared?  I hope I am, for the carnage that follows those dogs, Havoc indeed.

Groundhog Day's picture


Finally, what certainly helped Putin is that, as expected, China took the side of Russia, not of the "free world", in what is now a very distinct and clear axis of power the New Normal dipolar world.


So i'm between a rock and a hard place?

logicalman's picture


Oceania - ‎Eurasia - ‎Eastasia sound familiar?

layman_please's picture

Around 80% of russian natural gas exported to EU passes through ukraine

gateway to europe

eurogold's picture

Pipelines are the only leverage the Ukraine has. They deserve everything they are getting now from Russia for extorting Russia for years.

Bendromeda Strain's picture

Nice. I like how Armstrong capitalized NEVER as to when Yanukovich would be leaving office. Mulligan, anyone? Paul Craig Roberts is the one to be following on this latest installment of As The World Turns.

Abi Normal's picture

haha, very too good critique Bendro...Roberts has some sense about him.  I am, although, quite aware that $$$ is the root of this evil thing, but I find it quite necessary to carry on with daily transactions.  

They cut the gas, spring comes and crisis reduced, maybe...then again, what do I know?  It's a false flag op anyway you look at it.  The world is teetering financially and tptb needs them a war, broken windows, spilt treasure, and the like, capice?

Berspankme's picture

gas is not just for heating- try electric grid

Abi Normal's picture

correct on the grid, and in industrial endeavors, that is why I said 'reduced' not 'solved'...

Landrew's picture

Is it a  coincidence the Ukraine banking system went empty before the coup? 

Bindar Dundat's picture

Let's get ready to Ruuummmble!

Wahooo's picture

True in part, but there's the very real notion of Russia maintaining its historic defense buffers which to leadership is even more important than nat gas. Putin said as much last year, chastised the west for not acknowledging that his country has been invaded twice from Europe and suffered incredible losses - and damned if he were going to allow western encroachment again. Would be like China setting up forces in Mexico.

August's picture

...his country has been invaded twice from Europe

Twice in the last hundred years. The total invasion-from-the-West count is somewhere around six.

WMM II's picture

from: The "Ukraine Situation" Explained In One Map

"As Martin Armstrong warned this morning:

Yanukovych is a dictator who will NEVER leave office. It is simple as that. There will be no REAL elections again in Ukraine."


putin knew that guy was a jerk:

"The ordinary Ukrainian citizen, the ordinary guy suffered during the rule of Nicholas II, during the reign of Kuchma, and Yushchenko, and Yanukovych. Nothing or almost nothing has changed for the better. Corruption has reached dimensions that are unheard of here in Russia. Accumulation of wealth and social stratification—problems that are also acute in this country—are much worse in Ukraine, radically worse…I understand those people on Maidan, though I do not support this kind of turnover. I understand the people on Maidan who are calling for radical change rather than some cosmetic remodelling of power. Why are they demanding this? Because they have grown used to seeing one set of thieves being replaced by another." 



as for those who are of interest in what will actually occur:

"At the same time he suggested that Ukraine hold a referendum to adopt a new constitution, presumably addressing the status of Crimea and other regions with large Russian populations, and then hold elections for a new president and Parliament."



another 'Martin Armstrong: Obama "Using Same Nonsense As Putin''


to which i responded:


but that is the proof in the pudding. both sides know they are recognized as both talking nonsense. a negotiated two state solution is the only way out.

one state ukraine. one state crimea. one country ukraine. ok call it new ukraine.



as for the rest of the story....

well, you can find out how i see the future as easy as i can tell it again.