The world’s oil supply chain depends on a small number of key components, many of which are both vulnerable and in zones of conflict. This obvious to most of us, except the maniacs urging selling off much of our Strategic Petroleum Reserve (to get the money, to temporarily depress oil prices, to hurt speculators — for a number of specious reasons).
This week’s news about the Baku-Tbilisi-Ceyhan (BTC) oil pipeline reminds us why we need a large SPR.
Currently, the pipeline moves almost 850,000 barrels per day and the pipeline is expected to transport 1 million barrels per day (nearly 50 million tons per year) later this year (source). Current world consumption is aprox 85 million b/day.
A section of the pipeline in Turkey exploded on 5 August. Probably sabotage, probably by Kurdish separatists. How long until normal operation resume is not yet been announced. There are alternative routes, but at lower volumes.
The Russia – Georgia fighting could also stop the flow of oil through the BTC (see Information Dissemination for a good perspective US involvement in these events). In fact, it already has…
“Azerbaijan halts oil exports via Georgia ports: state oil firm“, AFP, 9 August 2008 — Due to the fighting, not a specific incident.
Now there are disputed reports that the pipeline has been attacked by the Russians, but not hit. Since the target is a visible and vulnerable target, perhaps the Russians were sending a signal. Perhaps to NATO, warning us to stay out.
“Russian jets targeted major oil pipeline”, Reuters, 9 Aug 2008
Russian fighter jets targeted the the major Baku-Tbilisi-Ceyhan (BTC) oil pipeline which carries oil to the West from Asia but missed, Georgia’s Economic Development Minister Ekaterina Sharashidze said on Saturday.
“This clearly shows that Russia has not just targeted Georgian economic outlets but international economic outlets in Georgia,” she said at a news briefing.
There have been no independent verifications of Russian jets targeting the BTC pipeline.
Of course, this is just an unconfirmed report from a war zone.
“BP unaware of pipeline bombing in Georgia“, AFP, 9 August 2008
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