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Kazakh riots create oil market jitters

Dec. 22, 2011 at 9:03 AM   |   Comments

ASTANA, Kazakhstan, Dec. 22 (UPI) -- Disruptions in oil production in Kazakhstan could have a similar impact as the Libyan war though the prospects for major violence is low, analysts say.

More than a dozen people were killed in riots in western Kazakhstan last week in the worst outbreak of violence since the country gained independence from the Soviet Union.

Kazakhstan in 2010 produced around 1.7 million barrels of oil a day compared with 1.6 million bpd in Libya, statistics from a world energy review from BP show. Disruptions in Libyan crude production from this year's war sent jitters across global energy markets and analysts worry about a similar impact with Kazakhstan.

David Wech, an analyst at JBC Energy in Vienna, told Bloomberg News a complete stoppage in Kazakhstan would be "quite similar" to the effects seen in Libya, with European markets feeling the brunt of the halt.

Other analysts said the riots in Kazakhstan are especially troubling consider the sanctions pressure put on Iran, one of the top producers in the Organization of the Petroleum Exporting Countries.

Kazakhstan's state-run energy company KazMunaiGas said last week its production wasn't curtailed by the rioting because its employees weren't involved. Zhanar Nazkhanova, an equity analyst at the country's Visor Capital, told Bloomberg news the prospects for major violence were low, however.

"This is a tribal issue that is specific to the western part of the country," he said.

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