(Matt Robinson, Reuters) - Intensified skirmishes around Nagorno-Karabakh risk spiraling out of control at the heart of a key energy transit region, a senior European Union envoy warned.
Peter Semneby, the EU's envoy to the South Caucasus, said the ceasefire between Azerbaijan and Armenian-backed forces in Nagorno-Karabakh should be strengthened, possibly with the deployment of more international observers after a summer of intensified skirmishes. Four Azeri soldiers were killed last week.
Renewed conflict almost certainly would have an impact on energy supplies to the West, with Azerbaijan host to oil majors including BP, ExxonMobil and Chevron. The BP-led Baku-Tbilisi-Ceyhan pipeline ships 850,000 barrels of Azeri crude daily to the Mediterranean, skirting Nagorno-Karabakh.
"I think that both sides are very much aware of the risks and costs of an escalation ... but there's always the risk that something can go out of hand," Semneby told Reuters late on Tuesday in Tbilisi after a trip to Azerbaijan.
"You have a lot of people, soldiers, on both sides who are nervous. In the heat of events, if something happens, it can easily get out of control and this is something we have to take seriously."
Clashes have worsened since 2008 around the mountain enclave, where ethnic Armenian Christians, backed by Armenia, threw off rule by Muslim Azerbaijan as the Soviet Union collapsed two decades ago.
"It is a precarious situation we have along the Line of Contact, because it is ... a self-regulated ceasefire with the two parties facing each other without any separation force in between," Semneby said. "I think the ceasefire regime needs to be strengthened."
Semneby said one possibility would be to deploy more observers, saying the six-person monitoring mission of the Organization for Security and Cooperation in Europe (OSCE) was limited in its ability to monitor and investigate.
Armenian-backed forces have held Nagorno-Karabakh and seven surrounding Azeri districts forming a land corridor with Armenia since the ceasefire was declared in 1994. An estimated 30,000 people were killed and more than a million displaced. Years of OSCE mediation led by French, Russian and American envoys have failed to produce a peace deal and Azerbaijan -- spending heavily on its military with revenues from oil sales -- frequently threatens to take the region back by force.
Low intensity skirmishes have killed around 3,000 people, mainly soldiers, since 1994, but observers say clashes have become more frequent and intense since early 2008. "This summer we have seen the most serious skirmishes along the line of contact for more than two years," said Semneby.
Military analysts warn that an Azeri military bid to retake the territory could be disastrous, with Nagorno-Karabakh heavily fortified since the war and holding the high ground.
"I believe the Azerbaijani leadership is aware of the enormous risks and potential costs that would be associated with an attempt to resolve the conflict by military means," Semneby said.