Yukos
The whole industry is watching events in Russia with great interest, as the Yukos drama plays out. Now the court has upheld the tax ruling, and Yukos is on the hook for $3.4 billion. With Russia seen as holding the main near term alternative to Middle East oil, the signals this case sends could be critical in attracting or repelling foreign investors.

I think we have to be cautions about reading too much into the fate of one company, however. There are many interpretations of this situation, which is complicated by national politics, personal ambition, and the desire of many Russians to see the injustices of the Yeltsin era rectified. Recall how Yukos and its peers were created, during a spasm of corrupt, winner-take-all privatization. So while Putin's actions look like a naked grab for power, they may also include an element of trust-busting, of the kind we saw in this country 100 years ago.

If the government forces Yukos into bankruptcy or dismemberment, our focus should be on what other steps Putin takes to reassure international investors and preserve the oil sector as the attractive engine of growth it has been in the last several years. That, more than the fate of Yukos itself, will indicate whether Russia wants its oil industry to be globalized or isolated.