Page 8 - FSUOGM Week 29 2022

FSUOGM COMMENTARY FSUOGM

hydrocarbon potential is available in order to infrastructure for oil flows to Europe, namely
stabilise the situation on global and European the Baku-Tbilisi-Ceyhan (BTC) oil pipeline that
energy markets.” reaches Turkey. It has delivered around 518mn
tonnes of oil to Europe since its inauguration.
Plausible deniability And in fact, the BTC pipeline already sends
If Russia is attempting to "punish" the EU and some Kazakh crude oil to Europe, though the
Kazakhstan and complicate the energy crisis volume is not significant.
more by cutting the Kazakh oil supply using its The Russian court's decision to halt the
local courts, it is an approach that offers Mos- CPC oil supply—later cancelled in favour of
cow plausible deniability. Whatever the realities, a small fine by a regional appellate court in
debates have been sparked in Nur-Sultan over Krasnodar—caused outrage in Kazakhstan.
the need for urgent export route diversification. CPC argued that the ruling was unlawful in
Nothing, however, can happen overnight. that it posed long-term risks to the pipeline's
Two main options for supply diversification functionality. “CPC is a continuous-cycle
are usually talked about: directing oil flows to enterprise. The immediate suspension of its
China and dispatching oil in trans-Caspian and activities could have irreversible consequences
trans-Caucasus shipments via Azerbaijan and for the production process and cause adverse
Georgia. and uncontrollable processes at the facility,” the
The China option would see Kazakhstan company said in a statement.
re-route oil flows but the pipeline to China can To some parties, the decision by the Krasno-
take oil from east and central Kazakhstan, while dar court to overturn the CPC suspension was
most of the large fields are in the country’s west. a surprise and amounted to Moscow opting to
Technically, it would be a rather challenging task, de-escalate diplomatic tensions. But the markets
and, according to a foreign oil company based in won’t be in any doubt—Russia successfully sent
the country, "it is unlikely that the re-route of oil the message that the fate of most of Kazakhstan’s
is possible." oil exports remains in its hands. Russia's decision
The second option, which would entail to hide behind provincial courts to camouflage
increasing oil exports on tankers traversing the a purely political context will not help reset rela-
Caspian Sea to Azerbaijan, from where the Euro- tions with Kazakhstan. But the realities of the
pean market becomes accessible, sounds more tense situation are inescapable.
realistic—but there appears to be a stark shortage Fuad Shahbazov is an independent policy
of tankers, and the project would require a great analyst focusing on regional security issues in
many. Again, officials might respond, “Great the South Caucasus and a Chevening FCDO
plan, but how many years can you give us to get scholar at the University of Durham School of
it realised?” Government and International Affairs (SGIA) .
Azerbaijan possesses the necessary energy He tweets at @fuadshahbazov. ™

P8 www. NEWSBASE .com Week 29 20•July•2022