Caught Between Russia and China in the Oil Markets

Written By Christian DeHaemer

Posted August 18, 2015

When talking about global oil and gas markets, China and Russia are often brought up as major players.

However, little thought is given to the countries caught between these two superpowers, and Kazakhstan is one of these counties that has to contend with its own issues in the crude market.

China Russia PipelineYou see, much like in the U.S., this Central Asian country has been cutting back on oil rig count, and letting go of workers by the hundreds.

And because it is “one of the primary destinations for migrant Central Asian workers” according to Stratfor Global Intelligence, these changes have a significant effect on many Central Asian economies.

As I’m sure you realize, this is causing as much social tension as it is causing economic strain.

A legislative change is causing even more problems: new labor laws could give more power over wages and employment to employers by taking that power from unions.

But the Kazakh government worries this may cause unrest leading to protests and riots. The country already had an event like this, which they called the Zhanaozen massacre, in 2011. Then, oil workers clashed with policemen over human rights rulings, and 14 people were killed.

The country also cites its proximity to Russia, and how similar problems with human rights legislation have lead to several overturned governments in recent decades.

Kazakhstan’s position not only gives it a view into the rough political happenings of both Russia and China, but makes it a possible point of contention between the two major powers’ strategic plans for the future.

The low oil market is hitting the entire world, even Kingpin Saudi Arabia, hard where it hurts. And this unfortunate middle country may spark the next round of social and economic wars in the area… unless it can make peace with its oil and gas unions.

To continue reading…

Click here to read the Business Insider article.

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Christian DeHaemer

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Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.

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