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Russia warns of sharp Caspian pipeline oil export drop after storm -Breaking

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© Reuters. FILE PHOTO A view of an exterior of a Caspian Pipeline Consortium pumping station (CPC), near Atyrau in Kazakhstan, October 12, 2017. REUTERS/Mariya Gordeyeva

(Reuters) – Russian and Kazakhstan’s oil exports to the Caspian Pipeline Consortium, (CPC), from the Black Sea might fall by as much as 1 million barrels per daily (bpd), or 1%, according to a Russian official.

Pavel Sorokin is a Deputy Minister of Energy and said that another berth might be affected by initial reports about one of three being hit by a hurricane.

Sorokin stated that maintenance can take as long as two months and could cause exports to fall by up to one million dollars per day.

According to the operator of CPC’s oil pipeline, which transports crude oil from Kazakhstan to international markets, a storm has hit Russia’s Black Sea section.

Since Russia invaded Ukraine in 2014, the CPC pipeline was the focus of attention. This has led to a reduction in Russian oil exports as well as an increase in oil prices. Although sanctions have been imposed on Russian oil by the United States, it has stated that flows through Russia from Kazakhstan should continue uninterrupted.

Around 1.2 Million barrels are shipped per day by the pipeline (bpd), representing 1.2% global demand. A major interruption to the pipeline’s flow will cause further disruption in a global oil market that is already experiencing one of its worst supply shortages since the 1973 Arab oil embargo.

Russia, Kazakhstan and major international oil companies such as BP are the main owners of most of the crude oil. Chevron (NYSE:). It exports oil via Russia’s Black Sea port at Novorossiisk.

Initial statements by CPC Pipeline operator indicated that one of their three mooring points was damaged in the storm. It will be repaired over the course of three weeks while they wait for vessels.

According to the company, exports should not be affected as there are two other berths that could operate normal.

CPC facilities suffered damage due to weather anomaly. He stated that there is a risk that the second berth could also be damaged in an Energy Ministry video.

Vitol, Trafigura and other major global traders said Tuesday that they had estimated the Russian oil crisis at between 2 and 3 million bpd. They also stated that the world would struggle to cope with an additional 2 million bpd disruption as this could lead to economic collapse and a price rise.

Russia claims that Western sanctions against Ukraine are economic warfare. Moscow is expected to use every tool at its disposal to defend itself. Officials also stated that Russia may limit gas supplies to Europe.

On Friday, the U.S Treasury advised buyers that they should be careful if certificates verifying crude oil from the CPC was not Russian-derived were falsified.

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