Crude oil prices edge higher as Georgia fighting rages
11 Aug 2008
Mumbai: Crude oil prices moved up following supply concerns in the wake of the conflict between Russia and Georgia. Light crude prices in the Asian market were $1.16 higher at $116.36 a barrels.
Oil prices, which lost as much as $5 on Friday, rose again as fighting between Russia and Georgia disrupted some exports from the Caspian region.
US crude was up $1 at $116.21 a barrel by afternoon, while London Brent crude rose 90 cents to $114.23. Oil has shed about $31 from its record highs of over $147 struck on 11 July. The fall has mainly been due to concerns about a slowdown in demand, particularly in the US.
The Azeri state oil company said oil shipments were down 50 per cent because of the conflict has affected two Georgian ports as well. Georgia produces no oil but it is a crucial transit route for Azeri crude.
BP Plc, Europe's second-largest oil company by market value, said its operations and production were not affected by the conflict in the South Ossetia region of Georgia.
BP, which was pumping crude through the Baku-Supsa pipeline to the Georgian Black Sea coast, after a fire on 5 August in Turkey stopped flows on the Baku-Tbilisi-Ceyhan oil pipeline, said the fire has now been extinguished and normal operations are being restored.
Georgia said Russian bombers have targeted the Baku-Tbilisi-Ceyhan pipeline across Georgia, which is a key link in the US-backed `southern energy corridor'' that connects the Caspian Sea region with world markets, bypassing Russia.
Georgia, which borders the Black Sea between Turkey and Russia, is being wooed by the US and its western allies to join the NATO, which Russia is opposing.
