Uzbekistan — if known at all — is known as one of the most repressive of the "-stans," stretching across the Central Asian land mass. Earlier this week, local news outlets reported that longtime President Islam Karimov had died.
The exact events remained shrouded in mystery, and the leader helpfully interrupted his death to congratulate the country on Independence Day three days later. Today, several reports have confirmed that Karimov, the only man ever to rule the country since its independence from the Soviet Union in 1991, has died at the age of 78.
Successions in Central Asia, where former Soviet strongmen have increasingly centralized power in their own hands, are no simple feat. But while this palace drama is certainly intriguing, what does the potential for instability mean for gas exports from a country that is the third-largest exporter of natural gas in the former Soviet Union?
Gas pipelines pivot eastward
Uzbekistan is home to 38.3 trillion cubic meters of natural gas, accounting for 1.6 percent of global production. That production is steadily growing, freeing up volumes for export. However, being "double-landlocked" — that is, having to cross two other countries before reaching the ocean — Uzbekistan has to take its neighbors into account when devising its export strategy.
In the Soviet era, the country was an important supplier to Russia and other member states. That trend continued after the fall of the Soviet Union, with Uzbek gas only reaching Europe as a secondary market via Russia.
But recently, despite a brief flirtation with the idea of exporting gas to European markets, Uzbekistan's gas export strategy has seen a pivot eastward, where increasing exports to China have helped fuel its break-neck growth as it tries to "gasify" its own economy.
Nevertheless, the slowdown in Chinese demand has led to the suspension of the Uzbek extension of the Central Asia-China pipeline, leaving some work to be done if Uzbekistan wants to complete this pivot toward Asian markets.
The new leader
Uzbekistan cannot compete with Kazakhstan as China's neighbor and main trading partner, nor with Turkmenistan — home to almost 10 percent of all global reserves. But China has been courting Uzbekistan as a new partner for diversification purposes, signing trade deals worth $15 billion and integrating its gas supplies into the Central Asia-China pipeline networks.
China, operating on a "no strings attached" basis, had good relations with Karimov, whose human rights abuses have made him unpopular in the West. Any new leader will have to find his own way of balancing the great powers of China and Russia on its doorstep. Tashkent — Uzbekistan's capital — has gotten on the wrong side of Moscow in the past and the country, while enjoying more independence from Russia than its neighbors, is playing a careful balancing game.
Security concerns likely to trump energy
Political shifts are never welcomed by the oil and gas industry, never mind fragile successions. However, the scale of Uzbekistan's gas production — while significant — is not enough to move markets. Equally, China benefits from diversified supplies designed to protect against precisely such interruptions.
Moreover, if the rest of the region is anything to go by, we can expect Karimov to be replaced by a continuity candidate as we saw in 2006 in Turkmenistan. Both the prime minister and the head of the security services are powerful men touted as potential successors. If a member of Karimov's dysfunctional family was appointed, we could perhaps expect more change.
The opaque nature of Uzbek power games mean that in a part of the world where (in the words of one journalist) "the whole vast region is kept relatively peaceful by a handful of aging men," we cannot rule out a scenario of broader regional destabilization. In fact, reports on Twitter suggest controls are being put in place on the country's borders.
But the key concerns are less likely to be over energy than security, the battle against extremism and the future of NATO supply routes.
