A Ukrainian drone attack in Krasnodar has crippled the capacity of the CPC pipeline, a key oil route from Kazakhstan to the Black Sea. The strike rendered the Kropotkinskaya pumping station non-operational, leading to reduced flow rates in oil transportation. This incident impacts both Kazakh oil exports and Russian profits from the pipeline, crucial for several multinational energy firms.
A recent Ukrainian drone attack in Krasnodar has affected the capacity of the Caspian Pipeline Consortium (CPC) pipeline, which transports oil from Kazakhstan to the Black Sea. The CPC pipeline is a collaboration involving multiple countries, including U.S., British, Italian, Russian, and Kazakh interests, and has a capacity of approximately 1.5 million barrels per day, representing about 2% of the global seaborne oil supply.
CPC reported that seven drone strikes targeted the Kropotkinskaya pumping station, the largest in Russia, causing its temporary inoperability. As a result, while the line has not completely ceased operations, crude transport through the Tengiz-Novorossiysk pipeline system is now occurring at diminished rates.
Historically, the CPC faced frequent disruptions from Russian entities at the start of the ongoing conflict, but prior to this attack, it had not been struck by Ukrainian forces. Notably, Chevron, ExxonMobil, Shell, and Eni, all aligned with Ukraine’s Western allies, are shareholders in this pipeline, which conveys oil from Kazakhstan’s Caspian fields.
Approximately 90% of the oil transported through the CPC originates from Kazakhstan; however, an attack on the pipeline would still significantly affect Russia’s energy revenue. Transneft, the Russian state oil company that oversees the pipeline’s operation, owns 31% and earns substantial profits from it.
The repercussions of the attack may extend to Western oil companies, with Chevron expecting significant cash flow from its Tengiz field investments, projected at $4 billion this year and $5 billion by 2026. A slowdown or halt in pipeline delivery may adversely affect these expectations, although Chevron maintains it continues to operate without interruption.
Kazakhstan remains heavily reliant on oil exports facilitated by the CPC, with the pipeline serving as a critical route for 80% of its oil exports. Despite the ongoing conflict, Kazakhstan adopts a neutral stance. Following the news of the pipeline’s reduced capacity, both Brent and WTI crude futures saw a slight rise, indicating market sensitivity to disruptions.
In summary, the Ukrainian drone strike on the CPC pipeline has resulted in reduced oil transport capacity, which impacts Kazakh oil exports and Russian energy revenues. While the pipeline remains partially operational, the event underscores the geopolitical sensitivities tied to energy infrastructure amidst the ongoing conflict. Both Western oil companies and the Russian state are closely monitoring the situation for potential economic repercussions.
Original Source: maritime-executive.com
