Tuesday, March 02, 2004

Kazakh Oil

Exciting things are afoot in Kazakhstan, even ahead of the arrival of famous bloggers with quick facts on the country. The nation's potentially vast oil industry is on the move, with serious movement toward a deal on a pipeline through China, as well as a Kazakh connection to the pipeline through the Caucuses and across Turkey. Azerbaijani President Ilham Aliyev was in Kazakhstan yesterday signing agreements on the latter.

The portrayal of Kazakhstan as a new Saudi Arabia may be a bit far-fetched for the immediate future, but the development of Central Asia's oil and natural gas reserves is one of the largest geopolitical issues of our time. Under President Clinton, Afghanistan policy was affected by pressure from both feminist groups opposed to the Taliban and oil companies which required stability to potentially build a southern pipeline, and American diplomats worked feverishly to prevent a pipeline from being built through Iran linking Central Asia with the Persian Gulf. The cynic in me also couldn't help but notice that 2000 saw the beginning of a trans-Balkan pipeline made possible by the Kosovo campaign aimed at linking up with Central Asia via the Black Sea.

Closely connected to this is China's growing demands for oil. The same cynic in me noted above wondered if Chinese opposition to a Western pipeline for Central Asian oil played into its vehement opposition to the Kosovo campaign, and whether Turkey's concern to help its fellow Muslims might have been affected by the desire to make one happen. (I don't know the current status of all that.) Now, it looks like Kazakhstan can supply a lot of China's oil needs, but had they not, another possibility was the Persian Gulf states, and I remember before the Iraq war reading on some report or other that the administration was concerned to get strategic control of the Persian Gulf as possible leverage in a global chess game with China, which IIRC was the major Bush foreign policy initiative before September 11. (Chinese berets, anyone?) Finally, most Kazakh oil now flows through Russia via old Soviet pipelines, and I doubt Kazakhstan's development of other options makes Russia terribly happy.

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