Armenian forces fire rockets at the BTC oil pipeline in Azerbaijan

CC BY 4.0Azerbaijani President Aliyev with the president of BP, in August 2018, CC By 4.0.

By | Rachel Brooks

October 6, 2020

This is a developing story.

Armenian forces fired rockets at the Baku-Tbilisi-Ceyhan, abbrev. BTC oil pipeline in Azerbaijan on Tuesday, sending shockwaves across the international oil industry. The Anadolu Agency reports that Azerbaijani prosecutors have labeled the attack an “act of terrorism.” The attacks were executed on Tuesday at 9pm local time. They were prevented by the Azerbaijani military. The attacks were launched at the BTC in the vicinity of Yevlah.  There is no reported damage at this time.

 However, Armenia is expected to pursue its offensive against the BTC. Attacks against the BTC on Tuesday were not entirely unexpected. Argus Media reported on October 5 that the Armenian offensive was moving nearer to the oil refineries of Azerbaijan as of Monday when Armenia launched an offensive on Ganja, the second largest city in Azerbaijan. While no direct hits have been reported on the BTC as of this reporting, a rash of violent uprising along this critical oil line is bad business for an already post-COVID-19 pandemic era shaky oil industry abroad.

Oil is the primary source of the economic structure in Azerbaijan, and the breadbasket of its foreign business relations. The BTC oil pipeline is the major supplier of crude oil to Turkey, Italy, and Israel. This is a major development in the geopolitical nature of this conflict. As oil pipelines are disrupted, the international structure will be forced to involve itself in the situation, to avoid greater catalysts and damages to their own economics. 

The shelling events on the BTC oil pipeline are also a major divergence from the expected impact of the conflict escalations. Major news outlets, such as NBC, predicted in the early hours of renewed escalations that they would have minimal effect on oil markets and would not likely cause an oil spike. The facts regarding the oil pipeline distribution now change with this assault on the BTC gas line, and markets will be volatile as a result. 

Risks are not only to crude oil products, but also to personnel. The BTC pipeline spans three countries from the Caspian Sea to the Meditteranean coastline, citing BP oil company, which is the major operator of the pipeline since it was opened for business in 2006.  Due to its transnational nature, the BTC pipeline employs personnel with international roots. In recent years, BTC boasts cross border projects such as a project with the European Bank of Reconstruction and Development in April 2016, the same era as the Four Days War, that was dubbed “the new Silk Road” for regional oil traders. Just as the BTC connects nations surrounding Azerbaijan, it also connects continental interests in the economic politics of Azerbaijan, now put directly at risk by the Armenian offensive. 

The region looks with the greatest concern toward the Russian interests as the conflict moves closer to international assets. Irina Tsukerman, U.S. security analyst, made note of the dangerous gambit that Russia and Iran have played in the South Caucasus region over oil in this report with Besa Center, which published on August 25 and accurately forecasted the dangers of the renewed Nagorno-Karabakh conflict. 

“There are signs that the current escalation between Armenia and Azerbaijan, far from being incidental to the Nagorno-Karabakh conflict, is driven by Russia’s and Iran’s economic warfare against a competing state and the need to return Europe to dependency on their oil and gas in light of US sanctions,” states the executive summary of Tsukerman’s analysis. 

“Armenia benefits from the bellicose activity thanks to a sophisticated information warfare campaign in a heated US election year that has been unmatched thus far by Azerbaijan. But Baku can still turn its underdog position around by pursuing an assertive and affirmative policy against aggressors on military, political, media, and legal fronts.” 

Armenia’s benefit in the situation appears now to be a detriment to the precarious geopolitical situation in the region. With Turkey backing Azerbaijan against the Armenian onslaught, Russian affairs with Turkey could become strained. This can have an immediate reflection on the conflict in the South Caucasus, but likewise an indirect impact on both Russia and Turkey’s interests in theaters of the Gulf-Med, theaters that the BTC reaches. 

As the world looks on, both sides of the domestic Nagorno-Karabakh conflict hope to gain the coveted support of the U.S. However, U.S. military expert Ben Minick believes the U.S. will take the role of a neutral mediator.

“The answer is relatively complicated. As a general rule, the United States does not get involved in situations that stem from the Southern Caucasus. This is for many reasons, primarily the geophysical location of the region. It is the confluence of Russia, Iran, Azerbaijan, Armenia, Georgia, and Turkey. Conflicts that start in this area of the world can have global consequences in a brief period,” said Minick,as quoted from his recent analysis piece “Why the US Will Not Get Involved in South Caucasus Fight.”

“The United States and Turkey are official allies, whereas there is no formal alliance between the United States and Russia. It is crucial to look at the fact that there are diplomatic ties between America and much of the region.”