Analysts: Baku using gas as political tool

BAKU, Azerbaijan, Oct. 20 (UPI) -- Diplomatic moves between Armenia and Turkey have prompted Azerbaijan to use its natural gas resources as a political tool, analysts say.

Turkey and Armenia moved to restore diplomatic ties damaged by claims of genocide against the Armenian population during World War I and complications over the disputed territory of Nagorno-Karabakh.

Azerbaijan and Armenia fought one another over the disputed territory in the 1990s. Azeri President Ilham Aliyev argued against the Turkish-Armenian measure, adding it was unreasonable to assume Baku could continue its gas relationship with Turkey under the current tensions.

"What state would agree to sell its natural resources for 30 percent of world market prices, especially under current conditions? This is illogical," he said.

Azerbaijan sells its gas to Turkey for $120 per thousand cubic meters.

If his threats are more than rhetoric, it could undermine efforts to move forward with the Nabucco gas pipeline to Europe, analysts tell Radio Free Europe/Radio Liberty.

"This is very important because it could potentially deliver a knockout blow to Nabucco," says Federico Bordonaro, an energy analyst with the Italian-based group equilibre.net. "Without Azerbaijan it would be even more difficult than it is."

The Western-backed Nabucco project is intended to ease Europe's dependence on Russian natural gas by bringing gas from Caspian suppliers. Despite the political will for Nabucco, the project lacks firm commitments from potential suppliers.

Azerbaijan sits on some of the largest gas deposits in the world.