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Crude oil exports from the CPC terminal off the coast of Russia’s Black Sea have been halted completely after sustaining “critical” damage, the head of CPC has said, according to Reuters.
According to Russian Deputy Prime Minister Alexander Novak, The Caspian Pipeline Consortium’s oil supplies may be stopped for as long as two months while repairs are made.
The disruption in crude oil exports was the result of major storm damage and continuing bad weather.
The CPC pipeline transports between 1.2 million and 1.4 million barrels per day of crude oil from Kazakhstan, adding even more pressure to a global market already struggling with tight supplies further constrained by sanctions on Russian crude.
The CPC pipeline carries oil from Kazakstan’s Tengiz oilfield to export infrastructure along the Black Sea coast. Most of the crude oil carried by the CPC pipeline belongs to Russia, Kazakstan, and international oil majors such as Chevron. It remains a vital crude oil artery for Kazakstan, accounting for two-thirds of the country’s crude oil exports.
A port agent chalked the damage up to “a spell of really strong norther wind” that required a single point mooring (SPM) to be taken offline to be serviced, Reuters reported. On Thursday, another SPM was found to be in need of service, and the third SPM was halted due to bad weather.
A disruption of crude oil flows now, when global crude oil inventories are tight and fears of shortages are heightened, could send oil prices soaring even higher.
Brent crude was trading at $119.10 per barrel on Thursday morning, up $3.65 (+3.16%) per barrel.
The disruption to Kazakstan’s exports comes as President Biden travels to Europe to discuss the possibility of sanctioning Russia’s oil industry. Meanwhile, President Biden is reviewing all available options on how to bring down the cost of gasoline prices at home.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.