Karabakh conflict: underlying energy issues

Audio 01:53

Oil wells from the oilfield located on the Caspian Sea coast outside Baku, Azerbaijan (illustrative image).

Mladen ANTONOV / AFP

By: Claire Fages Follow

5 mins

The oil and gas stakes are not unrelated to the resumption of the conflict in Nagorny Karabakh.

The Armenian separatist enclave is a few kilometers from the two pipelines which allow Azerbaijan to export its hydrocarbons to Turkey, and soon to Europe.

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Energy issues are implicit in the Karabakh conflict, relaunched a week ago by Azerbaijan's offensive in the Armenian enclave, with the support of Turkey.

Less than 40 kilometers from the front area is the valley used by Azerbaijani oil and gas routes, namely the BTC (Baku-Tbilisi-Ceyhan) pipeline and the South Caucasian Pipeline SCP (South Caucasian Pipeline). ), which end up in Turkey.

Energy infrastructure a few kilometers away

None of the belligerent states has an interest in attacking these infrastructures, especially not Azerbaijan, which lives on the export of hydrocarbons, nor Armenia, which would cross a very dangerous red line vis-à-vis of the international community.

Azerbaijan sees its resources melt away

But the timing of the Azerbaijani attack is not fortuitous, believes expert Pierre Terzian.

“ 

Azerbaijan is seeing its oil revenues plummet.

Its oil reserves are running out, crude is more and more expensive to extract or the price of a barrel has collapsed because of the Covid.

More seriously, underlines the president of Petrostrategy, the development of the gas project of Shah Deniz II, which was to take over, was designed on the basis of oil at 80 then at 60 dollars, not at 40!

Azerbaijan, which will start shipping gas to Italy in a few weeks, will sell it at a loss, it is already selling it at a loss to Turkey.

His finances will soon no longer allow him to buy weapons

 ”.

Turkey renegotiates its gas contracts

Turkey will renew a third of its long-term gas contracts in 2021. For now Russia is its main supplier, but Azerbaijan's volumes are expected to ramp up when the transanatolian TANAP pipeline operates at full capacity.

An argument to renegotiate its prices downwards with the Russian giant Gazprom.

Europe will soon receive gas from Azerbaijan

Finally, Europe is gently agitating against Azerbaijan, from which it expects the first volumes of gas by the end of the year, via the TAP Transadriatic gas pipeline.

This gas route will allow it to diversify its supply vis-à-vis Russia.

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