Peter Hoskin

What price oil?

As Morus writes in an excellent post over at Political Betting, the escalation of the conflict in Georgia will cause more than a few headaches for Western policymakers.  Most of their worries will centre around the Baku-Tbilisi-Ceyhan (BTC) pipeline – a pipeline which carries oil from the Caspian Sea to Turkey, from where it is shipped out to Western Europe and the US.  Problem is, that pipeline runs through Georgia – at points, it’s only 55km away from the South Ossetia region where much of the fighting is concentrated.  The Russians are certainly bombing in its vicinity, and the Georgians are claiming that the pipeline has been deliberately targeted, although not yet hit.

But the main worry isn’t that the pipeline might be partially destroyed.  In geopolitical terms, that would be little more than an inconvenience – simply put, the pipe could always be fixed again.  No, the main worry is that the conflict escalates to the point where Russian forces – or even Georgian separatists – gain sustained control of major parts of the pipeline. 

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