A Russian court has ordered a halt to the Caspian oil pipeline but exports are still flowing

MOSCOW (Reuters) – A Russian court has told the Caspian Sea Pipeline Consortium, which transports oil from Kazakhstan to the Black Sea via one of the world’s largest pipelines, to suspend activity for 30 days, although exports remain. flow.

Tengizchevroil, operator of Tengiz, Kazakhstan’s largest oil field, said oil supplies through the CPC pipeline have not been interrupted.

Tengizchevroil, in which Chevron holds a 50 percent stake, said it has sought clarification from CPC on the details and next steps after the ruling.

Three industry sources also said that oil supplies from fields in Kazakhstan to the CPC pipeline were not interrupted until Wednesday morning.

CPC, which handles about 1% of the world’s oil, said the decision to suspend operations related to paperwork related to the oil spills, and said the consortium that includes Chevron and Exxon (XOM.N)to abide by the court ruling issued on Tuesday.

Any major disruption to the CPC would put further pressure on the global oil market, which is facing one of the worst supply crises since the Arab oil embargo of the 1970s.

CPC said it had filed an appeal with the court in the Russian Black Sea port of Novorossiysk requesting a suspension of the execution of the ruling to avoid a halt that could lead to irreversible consequences for the pipeline equipment.

CPC did not provide any further comment when contacted by Reuters.

The Chinese Communist Party’s pipeline has been in the spotlight since Russia sent its troops into Ukraine, in what it calls a “special military operation.” Western sanctions imposed as a result reduced Russian exports and raised oil prices.

Oil prices rose more than 1% on Wednesday at around $104 a barrel, buoyed by supply concerns.

Russia has already reduced gas flows through the Nord Stream 1 gas pipeline, which supplies Russian gas to Germany and other European countries. This pipeline was operating at 40% capacity due to the dispute over equipment repair.

Penalties

The United States has imposed sanctions on Russian oil, but has said that flows from Kazakhstan through Russia must go uninterrupted. Meanwhile, the European Union has said it wants to wean itself from dependence on Russian fossil fuels by 2027.

A report on the status of the terminal seen by Reuters showed that oil shipments from the CPC terminal continued until midday on July 5, but it was not clear whether operations were continuing on July 6.

The Chinese Communist Party said on Wednesday that Russian Deputy Prime Minister Victoria Abramchenko had ordered the regulators, including industrial safety regulator Rostecnadzor, to inspect the facilities of the Russian part of the consortium.

She said the inspection discovered some “documentary” irregularities about plans for how to handle the oil spills. An oil spill occurred at the plant last year.

Kazakhstan said the government was discussing measures to address the impact of restrictions on oil exports through the Chinese Communist Party.

The pipeline exported up to 54 million tons, or about 1.2 million barrels per day, of Kazakhstan’s main crude, CPC light blend, last year from the Black Sea.

Pipeline operations have already been halted due to damage to Black Sea terminal equipment this year.

Meanwhile, Kazakh police said that an explosion occurred in the giant Tengiz oil field, the main source of oil for the Chinese Communist Party, killing two workers, Interfax news agency reported.

The operator said production at the field was continuing after the accident.

Reporting by Reuters offices, Additional reporting by Ron Bosseau in London; Editing by Edmund Blair, Guy Faulconbridge and Jane Merriman

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