While the impact on supply is unclear so far, the conflict between Georgia and Russia highlights the risks of the Caucasus route as a conduit for oil and gas to the West, analysts say. Since Friday, Russian troops have entered Georgia's breakaway Republic of South Ossetia and Georgia itself, occupying the city of Gori, about 47 miles from the Georgian capital, Tbilisi.
Coming days after a fire in Turkey shut down the Baku-Tbilisi-Ceyhan pipeline, the conflict has heightened fears about the reliability of the Caucasus region for oil transit.
The Georgian route takes oil and gas from Kazakh and Azeri Caspian fields to international markets and can carry at least 1.2 million barrels of oil a day.
"These events we've seen in just a matter of two days show us how fragile this region is and the energy supplies coming out of the area," said Julian Lee, senior analyst at the London-based Center for Global Energy Studies.
Paul Horsnell, a managing director and head of commodities research at Barclays Capital, said that despite the large hydrocarbon resources in the Caspian region, the challenged posed by the BTC fire in Turkey and the war in Georgia mean it will never be a serious alternative to Middle East oil.
In recent months, markets' fears have been focused on an escalation in tension between Iran and the West, in particular the risk of a blockade of the Persian Gulf's Strait of Hormuz, and on continuous unrest in the Niger Delta.
By contrast, many Western companies and countries have relied increasingly on Caucasus routes for their oil and gas.
Most of the oil goes through the Baku-Tbilisi-Ceyhan pipeline, which transports 850,000 barrels a day on average and has a capacity of 1 million b/d.
Another pipeline, the Baku-Supsa line, carries an estimated 150,000 b/d of Azeri crude. And the South Caucasus Pipeline, which, according to Troika Dialog, can ship around 6.6 billion cubic meters of Azeri gas a year, also crosses Georgia.
The U.S., in particular, has looked increasingly to the Caucasus as a cornerstone of its energy security policies as it tries to rely less on Russia and on the volatile Middle East for its oil.
Indeed, imports of Azeri crude and products to the U.S. had risen to 2.1 million barrels a month by May 2008, from 575,000 barrels a month in June 2006, the month the BTC pipeline lifted its first cargo, according to the U.S.'s Energy Information Administration.
"The United States has consistently supported BTC because we believe in the project's ability to bolster global energy security (and) strengthen participating countries' energy diversity," U.S. President George W. Bush said in a statement on the formal inauguration of the pipeline in May 2005.
But any significant impact on supplies from the Georgian conflict would cast doubt on this strategy.
For one, the only possible replacement to the Georgian transit route has a much lower capacity - and it is in Russia.
"The Baku-Novorossisk (oil) pipeline with a capacity of 100,000 barrels per day is currently the only alternative route" to the West, bypassing Georgia, said Kaweh Sadegh-Zadeh, a Caspian expert at oil and gas consultancy Wood Mackenzie.
A high-level official at Azeri state oil company Socar said Monday that Azerbaijan had exported 11,300 tons (84,750 barrels) of oil via the Baku-Novorossisk pipeline in the past 24 hours.
But that pipeline couldn't make up for the loss of the Georgian route, which transports 1.2 million barrels of oil a day - 1.4% of the world's daily oil flow - according to the CGES' Lee. Russian broker Troika Dialog says the transit route through Georgia has the potential to carry 1.6 million in oil, natural gas and products.
So far, it's unclear how much of the Georgian route is affected by the conflict, as there are conflicting statements from all parties.
Saturday, Georgia claimed Russia had bombed the vicinity of the Georgian side of the the BP PLC (BP)-operated BTC. BP said it was unaware of such an attack and said the pipeline hadn't been damaged.
Saturday, Agence France-Presse and other agencies reported Azeri state oil company Socar as saying it had halted oil exports via the Georgian ports of Batumi and Kulevi because of the conflict.
But the high-level Socar official said that, "despite the tense situation between Russia and Georgia, we continue to supply oil through Georgia via the Baku-Supsu pipeline and by rail to the Batumi oil terminal" on the Black Sea.
He added that Azerbaijan has shipped 26,000 tons - or 195,000 barrels - of crude by railway to Batumi in the past 24 hours.
BP, which operates Azeri fields jointly owned with Socar, said it continues to send crude to Batumi and through the Baku-Supsu pipeline.
Monday, Kazakh Prime Minister Karim Masimov said Kazakhstan had ordered a halt to his country's oil exports through the Batumi terminal. Batumi, which is owned by Kazakh state-owned company KazMunaiGas, receives the majority of the Central Asian country's crude going through Georgia. However, a person close to the operations at Batumi said Monday that the terminal is continuing to export every day.