Russia warns of sharp drop in Caspian pipeline oil exports after storm

An exterior view shows a new Caspian Pipeline Consortium (CPC) pumping station near the city of Atyrau, Kazakhstan October 12, 2017. REUTERS/Mariya Gordeyeva

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March 22 (Reuters) – Oil exports from Russia and Kazakhstan through the Caspian Pipeline Consortium (CPC) from the Black Sea could fall by up to 1 million barrels per day (bpd), or 1% of global output of oil, due to storm damage. berths, a Russian official said on Tuesday.

Pavel Sorokin, deputy energy minister, said the second berth could also be damaged after initial reports that one of the three was damaged by a storm.

Sorokin said maintenance could take up to two months, which could lead to lower exports of up to 1 million bpd.

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A storm in the Russian section of the Black Sea has damaged loading equipment at CPC, one of the world’s largest oil pipelines, which transports crude oil from Kazakhstan to world markets, its operator said on Tuesday.

The CPC pipeline has been in the spotlight since Russia’s invasion of Ukraine, which restricted Russian exports and led to a spike in oil prices. The United States imposed sanctions on Russian oil, but said flows from Kazakhstan through Russia should be uninterrupted.

The pipeline transports approximately 1.2 million barrels per day, or 1.2% of global demand. Any major disruption to its flows will put further pressure on a global oil market facing one of the worst supply shortages since the Arab oil embargo in the 1970s.

Most of the oil in the pipeline is owned by Russia, Kazakhstan and international oil majors such as Chevron . It exports oil from the Russian port of Novorossiysk on the Black Sea.

A Chevron spokesperson said the company is “currently assessing the situation.”

Pipeline operator CPC initially said one of the three berths had been damaged in the storm and would take at least three weeks to repair while waiting for a vessel. He said he hoped exports would not be affected as two other docks could continue to operate as normal.

“Due to the weather anomaly, the CPC facilities have been damaged. … There is a risk that (a second berth) will also be damaged,” he said in a video released by the ministry. Energy.

Major global trading houses such as Vitol and Trafigura said on Tuesday they estimate the current disruption to Russian oil at 2-3 million bpd. They said the world could barely cope with a disruption exceeding 2 million bpd as it would cause prices to spike again and an economic recession. Read more

Russia has said Western sanctions against Ukraine amount to economic warfare against it. Officials said Moscow would use all available tools to defend itself, including possibly limiting gas supplies to Europe.

The US Treasury on Friday asked buyers to be cautious if they believe certificates indicating that CPC crude is not of Russian origin have been tampered with. Read more

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Reuters reporting; Editing by Alex Richardson, Jonathan Oatis, Alexander Smith and Leslie Adler

Our standards: The Thomson Reuters Trust Principles.

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