The preventing that has erupted between Armenia and Azerbaijan over the long-disputed Nagorno Karabakh area is not like to have an effect on essential pipelines transporting oil and fuel to the worldwide markets, Chris Weafer, the founding companion of Macro-Advisory in Moscow, advised New Europe on September 28.
“There are no major oil or gas transit lines in the Nagorno Karabakh region and, at this stage, there is no reason to assume the conflict will move outside of the region to affect any significant oil or gas infrastructure,” he stated.
Weafer famous that the crude oil value had a small knee-jerk response to the information of the battle, because it at all times does when such conflicts contain an oil or fuel exporter. “But that move will be very short-lived. Oil traders will quickly return to the more important issues of demand and the OPEC+ production data,” he stated, requested whether or not the lethal clashes between the 2 former Soviet republics within the South Caucasus was prone to increase oil costs.
“This is a conflict that neither Russia, Europe or the US wants to see develop much further. It is their collective worst nightmare,” Weafer argued, explaining that Russia has a de-facto defence settlement with Armenia. They are each members of the Eurasian Economic Union and Russia’s solely remaining navy base within the area is in Armenia.
According to Weafer, Moscow is impossible to intervene in breakaway area of Nagorno Karabakh, or at the least indirectly, however on the similar time it won’t want to have its place in Armenia undermined whether it is accused of getting carried out nothing to assist. He reminded, nonetheless, that Moscow has additionally labored to enhance its relations with Azerbaijan and has a number of power agreements in place.
“Moscow officials will be working overtime to try and bring this conflict to an end as quickly as possible and to get both sides around a table,” Weafer stated.
The rising pressure comes as Azerbaijan is about to start out exports to southeast Europe from the second part of big offshore Shakh Deniz subject, which is developed by a consortium led by BP. “Historically the very vocal Armenian diaspora – there is a large number in France – would have pushed for EU support. But, the fact that Azerbaijan is about to start pumping approximately 10 Bcm (billion cubic metres) of gas annually through the Southern Gas Corridor, primarily to Italy but also to the Balkans, complicates the position for Brussels. This is undoubtedly something that Baku is banking on,” Weafer stated.
Azerbaijan’s President Ilham Aliyev can be most likely banking on no interference from Washington, which is home to a different massive Armenian diaspora and which, traditionally, has been capable of muster numerous assist for Armenia in Washington, Weafer stated, including that the expectation possibly that the White House will keep out of the battle because it offers with a number of home crises and heads into the November election.
“Turkey is much more willing to help its neighbour. If Azerbaijan were to retake Nagorno Karabakh with help from Turkey, then Ankara’s position in the region, and in the Levant, would be greatly strengthened at the expense of Russia, France and the US,” Weafer stated, noting that has lengthy been assumed that, as Azerbaijan’s place as an power provider to Europe elevated, then the larger the danger of a resumption of this battle.
Weafer famous that Azerbaijan has spent numerous its oil wealth in rebuilding its navy. “Russia plus the EU are at least conflicted, if not compromised, with energy deals, and the US distracted,” Weafer argued, including, “Baku has always made clear that this is unfinished business, so a return to war was always inevitable.”