Russia reported that oil flows through the Caspian Pipeline Consortium (CPC), a crucial route for supplying Kazakhstan and exporting oil globally, were reduced by 30-40% following a Ukrainian drone attack on a pumping station. The incident occurred just before talks between U.S. and Russian officials aimed at addressing the ongoing conflict in Ukraine.
Key Highlights:
Impact of the Attack:
Russian Deputy Prime Minister Alexander Novak stated that oil volumes dropped significantly due to the attack, which damaged energy equipment, including a gas turbine unit and a substation.
Repairs may take several months, affecting the pipeline’s operational capacity.
Pipeline Details:
The CPC pipeline spans over 1,500 km (approximately 939 miles) and transports crude oil from Kazakhstan’s Tengiz oilfield as well as from Russian producers.
A 30% reduction in CPC shipments could equate to a loss of up to 380,000 barrels per day.
Kazakhstan’s Oil Exports:
Kazakhstan relies heavily on the CPC for its oil exports and domestic crude supplies. Transneft, Russia’s state pipeline operator, indicated that Kazakhstan would need to reduce its exports by 30% to meet local demands.
Despite the attack, the CPC stated that the pipeline “continues to operate” and is still pumping oil to tankers in the Black Sea, albeit at reduced levels.
Responses from Companies and Governments:
Chevron-led Tengizchevroil (TCO) confirmed that production and export via the CPC pipeline remain uninterrupted, while Kazakhstan’s energy ministry stated that oil supplies are ongoing without restrictions.
The Kropotkinskaya pumping station, which was damaged in the attack, is currently bypassed in operations.
Details of the Attack:
The drone attack involved at least seven drones loaded with explosives and shrapnel, targeting the Kropotkinskaya station in Russia’s Krasnodar region.
The Ukrainian armed forces claimed responsibility, stating that they are targeting strategic facilities supporting Russia’s military efforts.
Market Reaction:
Following the attack, benchmark oil prices rose above $75 per barrel.