Russian and Kazakhstan oil exports via the Caspian Pipeline Consortium (CPC) from the Black Sea may fall by up to 1 million barrels per day (bpd), or 1 percent of global oil production, due to storm-damaged berths, a Russian official said on Tuesday.
Pavel Sorokin, a deputy energy minister, said the second berth could also turn out to be damaged after initial information about one of the three being damaged by a storm.
Sorokin said the maintenance could take up to two months, which could lead to exports falling by up to 1 million bpd.
A storm in Russia’s section of the Black Sea has damaged loading equipment of CPC, one of the world’s biggest oil pipelines, which ships crude from Kazakhstan to global markets, its operator said earlier on Tuesday.
The CPC pipeline has been in the spotlight since Russia’s invasion of Ukraine, which has restricted Russian exports and led to an oil price spike. The United States has imposed sanctions on Russian oil, but said flows from Kazakhstan through Russia should run uninterrupted.
The pipeline ships around 1.2 million barrels per day, or 1.2 percent of the global demand. Any major disruption to its flows will put further strain on a global oil market facing one of the worst supply crunches since the Arab oil embargo in the 1970s.
Most of the oil in the pipeline belongs to Russia, Kazakhstan and international oil majors such as Chevron. It exports oil from Russia’s Black Sea port of Novorossiisk.
A Chevron spokesperson said the company was “currently assessing the situation.”
The operator of the CPC pipeline initially said one of three mooring points has been damaged by the storm and it will take at least three weeks to repair while waiting for a vessel. It said it hoped exports will not be affected, as two other berths could continue to operate normally.
“Due to the weather anomaly, CPC facilities were damaged. ... There is risk that (a second berth) is also damaged,” he said in a video posted by the Energy Ministry.
Major global trading houses such as Vitol and Trafigura said on Tuesday they estimated the current Russian oil disruption at 2 million to 3 million bpd. They said the world could barely cope with a disruption exceeding 2 million bpd because it would lead to a further price spike and economic recession.
Russia has said Western sanctions over Ukraine amount to an economic war against it. Officials have said Moscow would resort to all available tools to defend itself, including possibly limiting gas supplies to Europe.
The U.S. Treasury on Friday told buyers to be cautious if they think certificates stating crude from the CPC is not of Russian origin have been falsified.
