Russian President Vladimir Putin has chosen energy security as the key theme for the Group of Eight, but US President George W. Bush's strong backing of the Baku-Tbilisi-Ceyhan (BTC) pipeline is likely to have been noted by the Kremlin.

The giant four-billion-dollar BTC pipeline, which was officially inaugurated on Thursday, will pump oil from the Caspian Sea to Turkey's Mediterranean port of Ceyhan, bypassing Russian territory and hence control.

Bush hailed the pipeline as an "impressive achievement... (that) marks a new era," after the US lobbied hard for its construction.

For the Bush administration, the BTC pipeline marks a victory in its bid to diversify US oil and natural gas supply routes.

This is especially true as its old Cold War adversary already controls many of the key energy supply routes to Europe.

"The US wants to create a situation where there are no bottlenecks," said AG Edwards analyst Bill O'Grady, referring to the Red Sea, the Strait of Hormuz and the Gulf of Mexico.

O'Grady said the US government does not want to be in the situation where its energy market could be "held hostage" if a supply disruption hits one of these energy transit routes.

And as oil prices have soared this week to record highs over 78 dollars amid an upsurge in Middle East unrest, so has the recent political rhetoric over energy supplies.

US Vice President Dick Cheney in early May charged Moscow of using its control over oil and gas routes as "tools of manipulation or blackmail," in reference to Russia cutting-off gas supplies to Ukraine in January.

"It's like a game of chess where each moves a piece," said Oppenheimer analyst Fadel Gheit.

"Russia (has) now definitely lost its military leadership to the US and wants to claim its strategic position as a major supplier," Gheit said.

He noted that Russia is now the world's second-largest oil exporting country after Saudi Arabia and controls almost half of Europe's natural gas supplies.

Oil supplies are critical to the US economy, the world's biggest energy consumer, and the White House does not want potential supply disruptions to derail US growth.

"We have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world," President Bush said in a January speech.

Bush also called for a 75-percent cut in US oil imports from the Middle East by 2025 to wean the country off its addiction.

In 2004, the US imported 58 percent of its oil from overseas, some 28 percent of which was imported from the Middle East.

This is why the Bush administration applauded the BTC pipeline which traverses over 1,774 kilometers (1,109 miles) through Azerbaijan, Georgia and Turkey, and avoids Russia and Iran, said O'Grady who said it was a US aim to "make it go through friendly countries."

While an upsurge in Middle East violence might endanger US oil supplies, it could benefit Russia.

"Any supply disruption in the Middle East could really make Russian oil extremely valuable," Gheit said.

"Therefore those countries which have access to the Russian oil like China and Europe will be in a better position than the US which really relies on imports from the Middle East," he said.

Turkish Prime Minister Recep Tayyip Erdogan called the BTC pipeline, which will pump the so-called black gold, "the Silk Road of the 21st century."

Although the mammoth pipeline is not yet running at full capacity, it is designed to carry up to 50 million tonnes of crude a year, and most of the oil will be shipped to Western markets.