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Kazakhstan may increase oil exports through Azerbaijan

BAKU, Azerbaijan, The EU-proposed price cap on Russia’s oil that entered into force on December 5 has already raised many uncertainties on the global energy market, and Central Asia, which very much relies on Russia’s pipeline infrastructure, may also meet serious consequences.


As Philipp Lausberg, Policy Analyst in the Europe’s Political Economy program at the European Policy Centre (EPC) told Trend, as the price cap makes the Russian export route even less attractive, this could lead to a further increase of Kazakh oil exports through Azerbaijan.


He also noted that as there will likely be less Russian oil on the market this could lead to lower global oil supply and higher prices.


“Kazakhstan as main oil producer in Central Asia would profit from these higher prices, as long as they manage to export their oil by circumventing Russia. However, Kazakhstan has traditionally exported their oil through a pipeline leading to the Russian port of Novorossysk. Since September it is also exporting some of its oil through Azerbaijani pipelines,” the expert said.


The expert pointed out that, since Azerbaijani pipelines are currently only taking a fraction of total Kazakh oil exports, the Central Asian country still has to rely on Russian pipeline infrastructure for a large share of its exports.


Therefore, the oil price cap will likely negatively effect its oil production and revenue, he noted.


“The EU’s embargo on Russian oil will increase European demand for oil from other countries. Virtually all other oil producing countries apart from Russia are likely to benefit from rising European demand for their crude and possibly from higher prices. This includes Middle Eastern, African and Latin American oil exporters, as well as Azerbaijan,” Lausberg said.


Source: TREND News Agency