Deadly clashes between Armenia and Azerbaijan are unlikely to result in major disruptions to energy production and supplies, analysts say, despite the region being a critical corridor for pipelines transporting oil and gas to the global markets.
“There is not really much anticipation that this will boil over into something more serious for oil and commodity markets,” Edward Bell, a senior director at Dubai-based Emirates NBD bank, told CNBC.
“If the geopolitical premium is not already in the price, I don’t think we’re going to see much reaction here on in,” Bell added, despite a worry that recent clashes could impact production or pipeline facilities, which have been subject to illegal taps, attack and sabotage during periods of heightened tension in the past.
The clashes between the two former Soviet republics in the South Caucasus are the latest flare-up of a long-running conflict over Nagorno-Karabakh, a breakaway region of Azerbaijan run by ethnic Armenians.
At the weekend, Armenia said Azerbaijan had carried out an air and artillery attack on Nagorno-Karabakh, but Azerbaijan said it had responded to Armenian shelling, according to NBC News, which has not been able to independently confirm the number of injuries or fatalities.
