Monday, January 17

Kazakhstan unrest upsets oil but spares uranium

The unrest in OPEC + member Kazakhstan is heating up oil prices as investors fear possible supply disruptions, but the uranium market seemed spared so far, even though the country is the second largest producer global.

“The riots clearly represent a risk for the supply of the world market” of crude, assures AFP Bjarne Schieldrop, analyst at Seb.

Over the week, crude prices rose about 5%, and on Friday, Brent surpassed the $ 83 per barrel mark, “its highest level since the drop in prices triggered by the appearance of the Omicron variant in late November” , according to Carsten Fritsch, analyst at Commerzbank.

The protest erupted in the provinces on Sunday, after a rise in gas prices, before spreading to large cities, especially Almaty, the economic capital of Kazakhstan, where the demonstrations turned into riots against the regime.

President Kassym-Jomart Tokayev on Friday rejected any possibility of negotiation with the protesters.

– Production not yet affected –

The country is the largest oil producer in Central Asia, with the 12th proven reserves of crude in the world, according to the US Energy Information Agency (EIA). Kazakhstan produced some 1.8 million barrels per day in 2020.

It is also the second largest oil producer in OPEC partner countries within OPEC +, behind Russia. Black gold accounted for 21% of Kazakhstan’s gross domestic product (GDP) in 2020, according to the World Bank.

Production at Tengizchevroil, Kazakhstan’s largest oil company, has been “temporarily adjusted due to protests at 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, analyst at

Moreover, at the end of the session on Friday, crude prices fell a little, Brent yielding 0.28% to 81.76 dollars around 4.30 p.m. and WTI 0.54% to 79.03 dollars.

– Spared uranium –

Kazakhstan, the 9th largest country in the world, is teeming with manganese, iron, chromium and coal.

It also has the world’s second largest identified resource of uranium, according to the Cyclops annual commodities report. Supplier of French atomic power stations, it generates 40% of world production, according to data from CRU Consulting.

For Toktar Turbay, analyst at CRU Consulting, however, the current crisis is more “likely to create minor discomfort” than a real crisis, as China has accumulated enough uranium to meet its needs in the event of short-term disruptions.

“Uranium mines are being placed in remote areas of the Turkestan oblast, largely untouched by the protests and ongoing clashes in the country,” he explains.

“More than half of Kazakh uranium exports go to China. There could be logistical obstacles to delivering products to the borders, as the main routes pass through the Almaty region,” where all the main clashes took place, warns the expert.

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