The riots in OPEC+ member Kazakhstan have shaken oil prices, as investors fear supply problems, but the uranium market remains intact so far, of which the central Asian country is the world’s second largest producer.
“The disturbances clearly represent a risk in the supply of the world market” for oil, Bjarne Schieldrop, an analyst at Seb, told AFP.
During the week, oil prices rose about 5% and on Friday Brent surpassed $83 a barrel, “its highest level since the price slump caused by the emergence of the omicron variant in late November,” according to Carsten Fritsch, an analyst at Commerzbank.
The protests began last Sunday in the provinces, after a rise in gas prices, and spread to other cities, mainly to the economic capital Almaty, where the demonstrations turned into violent riots.
On Friday, President Kassym Jomart Tokayev ruled out negotiating with the protesters.
– “In short time” –
The country is the largest oil producer in Central Asia, with the world’s 12 proven oil reserves, according to the US Energy Information Administration (EIA). Kazakhstan produced 1.8 million barrels a day in 2020.
It is also the second largest producer of oil in the member countries of the Organization of Petroleum Exporting Countries (OPEC), gathered in the so-called OPEC+, behind Russia.
Black gold accounted for 21% of Kazakh GDP in 2020, according to the World Bank.
Production at Tengizchevroil, Kazakhstan’s largest oil company, has been “temporarily adjusted due to the protests in the Tengiz field,” said Stephen Brennock of PVM Energy.
However, for many analysts nothing indicates that Kazakh oil production will be significantly affected. As of Friday, “production in the country’s three main fields continued,” Brennock explained.
“The disturbances in Kazakhstan increase in the short term,” said Neil Wilson, analyst at Markets.com.
Proof of this, at the close of Friday, oil prices dropped a little: Brent fell 0.28% to $81.76 at 4:30 pm and WTI 0.54% to $79.03.
– Intact uranium –
Kazakhstan, the ninth largest country in the world, has large amounts of manganese, iron, chromium and coal.
It also has the second identified uranium reserves in the world, according to Cyclope’s annual raw materials report. Supplier of French atomic plants, it generates 40% of world production, according to data from CRU Consulting.
For Toktar Turbay, an analyst at CRU Consulting, the current crisis could represent a “small nuisance” in supply, as China has accumulated enough uranium to satisfy its needs in case of short-term problems.
There are uranium mines “in remote regions of the oblast (province) of Turkestan, very far from the current demonstrations and disturbances in the country”, he explains.
But he warns that “more than half of Kazakh uranium exports are destined for China. There may be logistical obstacles to the delivery of products at the borders, as the main routes pass through the Almaty region”, where the main clashes take place.
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