Kazakhstan crisis, oil salt, eyes on uranium
The still unresolved crisis in Kazakhstan will continue to be at the center of the attention of investors in commodities next week. In fear of possible supply disruptions, oil prices have risen while uranium prices so far seem less affected by political unrest, even though the country is the second largest producer in the world. Over the course of the week, crude oil prices increased by about 5% and yesterday Brent crude exceeded $ 83 a barrel, “the highest level since the drop in prices triggered by the appearance of the Omicron variant at the end of November”, according to Carsten. Fritsch, analyst at Commerzbank “.” The riots clearly represent a risk to the world market supply “of crude oil, says AFP Bjarne Schieldrop, analyst at Seb. Kazakhstan is the largest oil producer in Central Asia, with the twelfth confirmed crude oil reserve in the world (according to the US Energy Information Administration). In 2020 it produced about 1.8 million barrels per day and is the second largest oil producer in OPEC partner countries within the Opec +, behind Russia According to the World Bank, black gold represented 21% of Kazakhstan’s gross domestic product in 2020.
The effects of the crisis in Kazakhstan on raw materials
The production of Tengizchevroil, the largest oil company in Kazakhstan, has been “temporarily changed due to the protests in the Tengiz field”, said Stephen Brennock of PVM Energy. But for many analysts there is no indication that Kazakh oil production has been significantly affected. On Friday, “production in the country’s three main fields continued,” said Brennock. “The unrest in Kazakhstan is bullish in the short term,” notes Neil Wilson, an analyst at Markets.com. Kazakhstan is rich in manganese, iron, chromium and coal and has the second largest identified uranium resource in the world (according to the Cyclops annual raw materials report). French nuclear power plant supplier, it generates 40% of world production (according to data from CRU Consulting). For Toktar Turbay, an analyst at CRU Consulting, the current political situation is more likely to create slight inconvenience than a real crisis, as China has accumulated enough uranium to meet its needs in the event of short-term disruptions. “Uranium mines are located in remote areas of the Turkestan oblast, largely untouched by the protests and clashes in the country,” he explains. “More than half of Kazakh uranium exports go to China. There could be logistical obstacles – warns Turbay – to the delivery of products at the borders, as the main routes pass through the Almaty region”, where the main clashes took place. .
From energy to food production: how many business for Italy in Kazakhstan
But the effects can also be felt on Italy, which is Kazakhstan’s first European partner. Repubblica explains: “Eni has been operating in Kazakhstan since its independence, in 1992, and has reached 40 million barrels of crude oil and 2.9 billion cubic meters of gas in two fields: the offshore in the Caspian of Kashagan (in which it has 16.8% in joint venture with Shell, Total, Exxon, ConocoPhillips and where it aims to reach a total of 450 million barrels), and Karachaganak in the north-west (here it has 29.2 % with Shell, Lukoil and Chevron) “. The relationship and interests go beyond energy: “In Kazakhstan there are large temperate areas that lend themselves to many food crops”, Luigi Scordamaglia, head of the Italy sector, explains to Repubblica. “For now, Italy has exported 17 million products to Kazakhstan in the first nine months of 2021, including 3 million wine, and imported cereals and feed for 35 million. Figures that can rapidly multiply” concludes Repubblica.