Despite the War between Georgian and Russians, Crude oil fell hard Monday. The major military engagement in Europe could have large repercussions on the global oil market. Even though the news was on the minds of energy traders, it didn’t seem to effect the price of crude oil the way one would expect.
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The price of West Texas crude fell today to $114.45 and the Brent was flat at $113.33.
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The effects from a long-term conflict between the two could alter the global oil supplies in a big way. it seems that Russia is about 100 miles from taking control of the Baku-Tbilisi-Ceyhan (BTC) oil pipe line. The pipeline is the second longest one in the world, the BTC carries oil from Azerbaijan over 1,099 miles to Ceyhan Marine Terminal which on the Mediterranean Sea. It pases through Georgia and Turkey. Even though the pipeline won’t be fully operational until next year. At that time it will have a capacity of one million barrels of oil a day. There has been reports of Russia bombing the pipeline within the last 48 hours.
If the reports are correct, Russia is within 100 miles of assuming control of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline. The second longest oil pipeline in the world, the BTC pipeline carries oil from Azerbaijan 1,099 miles through Georgia and Turkey to the Ceyhan Marine Terminal on the Mediterranean Sea. The pipeline first began transporting oil in October 2005. Scheduled to become fully operative in 2009, the BTC pipeline has a throughput capacity of 1 million barrels of oil a day. The pipeline is owned by Azerbaijani, U.S., European and Asian oil companies — Russia has no ownership stake. Some media have reported that Russia’s air force has bombed the pipeline in the last 48 hours.
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With any luck this issue will be over soon and oil will stay at these levels or even drop more (like back to $9 a barrel, I know wishful thinking).
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