Azerbaijan, Baku, Jan.17 / Trend /
Azer Ahmedbeyli, Trend analytical centre expert
The crisis over Iran shows direct dependence of the world economy on ambitions and it is not so important whether the matter is blocking the Strait of Hormuz, Suez Canal or Gibraltar.
Around 17 million barrels of oil per day were transported via the Strait of Hormuz in 2011, or roughly 20 per cent of world oil trade. If Tehran really succeeds in blocking this strategic transport route, then according to many professional experts, oil prices will rise by $20-40 during the first hours of action and if the Strait is blocked for over 72 hours world oil prices will increase up to $200 per barrel.
Tehran's statements endangering global energy security make the subject of diversification of hydrocarbons export routes even more pressing.
According to BP, about 2.4 million barrels of oil per day are exported from Middle Eastern countries to Europe and virtually all of this volume is transported by sea via the Strait.
In these circumstances it would be good for Europe to have alternative options of supplies and one such on certain conditions may become the Trans-Caspian oil pipeline from Kazakhstan through the bottom of the Caspian Sea to Azerbaijan and further to Europe - half-forgotten and put on the back burner.
The idea was put forward in the mid-1990s by the US which started then to find alternatives to dependence on Gulf oil. All sides discussed construction of a 700-kilometre oil pipeline from Kazakhstan to Azerbaijan through the bottom of the Caspian with an initial capacity of 25 million tons per year increasing up to 50 million and worth about $4 billion (according to Total) in 2005 along with use of tanker shipping.
Later a contract was signed on support and assistance to oil transportation from Kazakhstan via the Caspian and Azerbaijan to world markets via Baku-Tbilisi-Ceyhan in 2006. The contract saw the construction of oil and receiving terminals along both sides of the Caspian, use of large dead weight tankers and the construction of additional connecting facilities to the BTC system. The contract didn't note construction of a submarine oil pipeline through the Caspian as an important element of the Trans Caspian system of oil transportation.
Huge oil fields of Kazakhstan - Tengiz and Kashagan would become a resource base for these supplies to Europe. Shareholders of the North Caspian Operating Company estimate recoverable reserves of Kashagan at 1.5 billion tons and geological reserves of this structure at 4.9 billion tons. Recoverable reserves of the Tengiz field are estimated from 750 million to 1.125 billion tons and geological reserves at over three billion tons.
Some 80 million tons of oil were produced in Kazakhstan in 2011 and it is in addition to the fact that commercial production at the Kashagan field has not started yet. According to a KazMunaiGas forecast, oil production will increase up to 140 million tons per year by 2020, and Kazakhstan will become one of the world's 10 largest oil producers. With such production it is unlikely that tanker volume potential will play a great role in transportation of the Kazakh oil to Europe.
Europeans as well as Kazakhstan shouldn't abandon construction of an oil pipeline through the Caspian even if its implementation may take a lot of time and effort. This is a beneficial offer for both sides. Otherwise Kazakh oil traditionally as it happens nowadays along with Turkmen gas will seek routes to the East.