Kazakhstan is in the midst of a major unrest and this is likely to make China very uncomfortable. You may wonder how. Well, Russia is using the ongoing unrest in Kazakhstan to control the oil and gas trade from Central Asia to China. This will put Beijing entirely at Russian President Vladimir Putin’s mercy for energy supplies.
Kazakhstan unrest explained
Kazakhstan, a Central Asian country with 3% of global oil reserves, is in the midst of a major unrest. The country is witnessing fuel protests despite holding considerable oil and natural gas reserves.
Fuel riots have rocked the Kazakh government, causing resignations at the top level and a ferocious crackdown on the protesters. The protests began on Sunday when the government lifted a cap on the pricing of LPG that many Kazakhs use to fuel their cars. Things escalated quickly and soon the unrest has since expanded to include political grievances.
The unrest soon led to violence. Authorities say that at least 18 members of the security forces have died, two of whom were found decapitated. Meanwhile, the security forces in Kazakhstan say that they have killed dozens of anti-government rioters in Almaty, Kazakhstan’s largest metropolis. [show videos]
Almaty itself is in a bad state now with littered streets, ruined government buildings and bullet casings scattered over the grounds of the Presidential residence.
Russian troops arrive in Kazakhstan
Russia has rushed in paratroopers to put down a countrywide uprising in Kazakhstan.
Russian troops have been sent to the Central Asian country at the request of Kazakh President Kassym-Jomart Tokayev. Kazakhstan is a post-Soviet State. It may be a Muslim country, but it also has a large Russian minority which keeps Kazakhstan close to Moscow. Also, Kazakhstan is a member of the Russia-led Collective Security Treaty Organization (CSTO). So, don’t be surprised if Tokayev wants Putin to “stabilise” Kazakhstan.
Why China must be worried?
Well, it is all about oil and natural gas. Russia wants to control China’s oil and gas supplies from Central Asia. You may wonder why?
(1/3) Russia’s militarisation in #Kazakhstan is going to have explosive consequences in the global oil and gas market, if Tokayev finally gives in. For past couple of years, Russia has been trying to control China’s oil and gas purchases from Central Asia.
— Niva Yau 邱芷恩 (@nivayau) January 6, 2022
Presently, Russia supplies 200,000 barrels of oil per day to China in accordance with a 10-year supply deal that is due to expire in 2024. China, however, wants to cut crude oil imports from Russia starting 2024.
Beijing argues that Russian crude oil coming to Western China via Kazakhstan is no longer needed. Actually, most of China’s ethnic minorities and undeveloped regions are located in its Western territory. On the other hand, the Han Chinese majority is predominantly located in prosperous Eastern China.
This is why Eastern China occupies 94 percent of the Chinese population in 43 percent of its territory. So, most of the fuel is consumed in Eastern China and this is why it is saying that it doesn’t want too much of Russian crude oil.
China was trying to pull a fast one. On one hand, it was avoiding Russian crude oil coming via Kazakhstan. And on the other hand, it kept expanding its footprint in the Kazakh oil and gas industry in a bid to source its energy supplies from the oil-rich Central Asian country and dump Russian supplies.
But Putin isn’t the one to take China’s nonsense. He was already pushing Kazakhstan to agree on a regional Eurasian Economic Union (EAEU) standard tariff for oil and gas prices. Russia is the leading power in EAEU and any such agreement will give Moscow the price-setting control over oil and gas trade between China and Central Asia.
Tokayev was, however, resisting Putin’s demands. But now, the Kazakh President has himself requested help from his Russian counterpart for quelling riots and violence in Kazakhstan. The Russian military help is bound to ramp up Moscow’s influence in Kazakhstan even further and we won’t be surprised if Kazakhstan agrees on a standard EAEU tariff.
China wanted to dump Russia by sourcing crude oil from Kazakhstan. But now, Putin will himself control the Kazakhstan-China oil and gas trade itself. This is a huge bargaining chip for Russia ahead of the expiry of the 10-year oil supply deal between Moscow and Beijing. Russia is paralysing China’s energy supply chains, effectively making Xi Jinping’s evil regime in Beijing extremely vulnerable.
I thought oil and gas influence is fading in global economy and politics?