MOSCOW, Aug. 13 -- Alarmed by record-high election-year oil prices, President Bush in recent days has sent repeated appeals through intermediaries to the man he calls "my good friend," President Vladimir Putin, asking him to calm the politically charged crisis surrounding Russia's giant Yukos Oil Co. in the interest of stabilizing world energy markets.
The Putin government's effort to seize control of Yukos, which pumps 2 percent of the world's crude supply, has helped drive international oil prices to record highs in recent weeks, exacerbating economic anxiety in the United States just 80 days before the Nov. 2 presidential election.
Mikhail Khodorkovsky, the jailed head of Yukos, was arrested in October. Many U.S. officials saw the arrest as selective justice against a political rival of the Kremlin and have expressed concerns on how the Yukos case is being conducted.
(Alexander Natruskin -- Reuters)
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National security adviser Condoleezza Rice telephoned Putin's chief of staff last weekend to express concern over the crisis's impact on international markets. The State Department on Thursday publicly called on Russia to put aside internal "political considerations" in order to resolve the Yukos matter. Energy Secretary Spencer Abraham called his Russian counterpart Friday to reinforce the message and Commerce Secretary Donald L. Evans planned to do the same, officials said.
"Obviously, from our standpoint, the market seems to respond to any kind of bad news and hardly ever to good news," said a senior U.S. administration official, who spoke on condition of anonymity because it is not his job to brief reporters. "So to the extent they can help remedy this situation, that's good for the market."
It was unclear what, if any, impact the American calls had. Putin has made no comment about Yukos in two months, and his staff has said nothing publicly about the calls by Rice and Abraham.
Russia's oil-dependent economy is enjoying benefits from current prices, which rose Friday to a record $46.58 per barrel, but the country also faces substantial losses if the government's freeze on Yukos bank accounts forces the company to shut down production.
Russia's Federal Energy Agency director, Sergei Oganesyan, told reporters this week that a Yukos shutdown would have drastic consequences and said he was trying to persuade the government leadership to unfreeze the accounts.
U.S. officials said they were not trying to interfere in the legal cases against oil baron Mikhail Khodorkovsky and his company but expressed concern about the way the cases are being conducted.
"In our view, the appearance of a lack of due process and threat to private property rights have resulted in both the Russian and the international business communities being on their guard," State Department spokesman J. Adam Ereli said Thursday.
The concern in Washington underscored the global impact of the battle over Yukos. "It affects everybody in the world now. It's no longer just about [Putin] and Khodorkovsky," said William F. Browder, chief executive of Hermitage Capital Management and one of the leading American investors in Russia.
Other factors are also pushing prices up. Instability in Iraq, soaring demand in China and a national referendum in Venezuela to be held Sunday have all fueled uncertainty. Yukos pumps 1.7 million barrels of oil a day, the same amount Venezuela provides the United States and nearly as much as Iraq produces when its pipelines are operating.
In the Russian case, Bush finds himself at odds with one of his closer overseas allies. Bush has held out his relationship with Putin as a signal achievement of his foreign policy, declaring after their first meeting that he had gotten "a sense of his soul." Their division over the war in Iraq was short-lived, rarely personalized and quickly papered over.
But Khodorkovsky's arrest by masked Russian agents in October troubled many U.S. officials, who saw it as selective justice against a political rival to the Kremlin. The escalating legal attack on Yukos this summer has pushed the matter onto Washington's agenda because of its impact on world oil prices.
"There is an irony and there is a paradox" that Bush's friend Putin would be causing problems for the American president, said Tatyana Parkhalina, director of the Center for European Security Problems, a Moscow research organization. But Parkhalina doubted that Putin would back off just to help Bush. "He will listen, of course, but he will behave as he thinks is right for Russia. Frankly, I don't think Mr. Putin will change his approach toward the Yukos affair."