Russian Court Orders Halt To Kazakh Oil Exports Via Caspian Pipeline

The Caspian Pipeline Consortium (CPC), which transports oil from Kazakhstan to the Black Sea via one of the world's largest pipelines, has been ordered by a Russian court to halt operations for 30 days, according to Ron Bousso of Reuters.

Photo Insert: The Caspian Pipeline Consortium (CPC) handles roughly 1% of world oil.

CPC, which handles roughly 1% of world oil, said the decision to halt operations was connected to paperwork on oil spills and that the consortium, which includes U.S. corporations Chevron and Exxon, had to follow the court judgment on Tuesday.

According to two trading sources acquainted with the terminal operations, oil shipments from the CPC terminal on the Black Sea continued on Wednesday morning. According to three other industry sources, oil deliveries from fields to the CPC pipeline were uninterrupted as of Wednesday morning.

Any significant disruption to the CPC would put additional strain on the global oil market, which is already experiencing one of its severe supply shortages since the Arab oil embargo in the 1970s.

CPC said it had filed an appeal with a court in the Russian city of Novorossiisk, requesting that the ruling's enforcement remain in order to avoid a standstill that could have irreversible effects on the pipeline infrastructure.

The CPC pipeline has been in the spotlight since Russia deployed soldiers into Ukraine in what it calls a "special military operation," resulting in Western sanctions that have reduced Russian exports and increased oil prices. Oil prices rose more than 1% on Wednesday, topping $104 a barrel, boosted by supply concerns.

Russia has already restricted gas shipments through the Nord Stream 1 pipeline, which transports Russian gas to Germany and other European countries. Because of a disagreement over equipment maintenance, that pipeline has been operating at 40% capacity.

The United States has placed restrictions on Russian oil, but has stated that flows from Kazakhstan through Russia should continue unabated. Meanwhile, the European Union has stated that it intends to phase out its reliance on Russian fossil resources by 2027.

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