Oil Casualties: Kazakhs Mull Exporting Through Russia

Well that didn’t take long. Russia’s military incursion into Georgia, home to a key oil and gas pipeline, stoked fears that the West would have a harder time convincing Central Asian countries to defy Russia and take part in future pipeline projects that would reduce dependence on Russia. Now, some countries seem to be bailing out of the existing ones.

Kazakhstan is considering diverting its oil exports away from the BTC pipeline that runs through Georgia, and using Russia instead. The reason? “Security concerns,” brought about by Russian military intervention. From Turkey’s Hurriyet:

"Kazakhstan is considering pumping its oil through Russia as an alternative to the Baku-Tbilisi-Ceyhan (BTC) pipeline due to increased security concerns over the clashes in the Caucasus, a Turkish daily reported on Thursday. A high level Kazakh official told Turkish business daily Referans that question marks now hang over the security of the BTC pipeline. “We could reconsider our decisions on sending Kazakh oil to the world market. Changing the (export) route is in our agenda now,” the official was quoted as saying by Referans."

That’s a blow to the existing BTC pipeline, not to mention any others the U.S. and Europe plan to build. It was meant to be expanded to handle additional oil coming from the big Kashagan fields in Kazakhstan. Turkish Energy Ministry officials told the newspaper “expansion of the BTC line would only be possible with the supply of Kazakh oil.”

The big worry about the Russian-Georgia conflict was that it heralded a new “iron curtain” in the region that could affect oil supply lines. The big surprise is how quickly that appears to be coming true.

* * * * *

Click on the link to access in-text links.

See also: http://current.com/items/89210784_while_the_world_s_attention_was_focused_on_the_crisis_in_georgia

So now, counting its ally Iran, Russia has a near-monopoly and control of the Caspian Sea Basin oil and natural gas. Well done, Bush, Cheney Rice, McCain, and Saakashvili!