Caspian Pipeline Consortium (CPC) was ordered last week by a Russian court to suspend its operations, citing environmental arguments, meaning that Kazakhstan annual supply of 67 million tons of oil through Russia to Europe is under threat. This was only two days after President Kassym-Jomart Tokayev told Council President Charles Michel his country is ready to send more oil to the EU. Tengizchevroil, the operator of Kazakhstan’s largest oilfield, Tengiz, pointed out that nevertheless, oil supplies via the CPC pipeline had not been interrupted.
⚡️Russia blocks Kazakhstan's oil transit to Europe.
According to the Russian news agency Interfax, a Russian court has closed the Caspian Pipeline Consortium terminal for 30 days under alleged technical issues. The terminal is Kazakhstan's main exit point for Kazakh oil.
— The Kyiv Independent (@KyivIndependent) July 6, 2022
Today, another Russian court overturned the ruling, merely fining the company 200,000 rubles.
Tokayev had told the EU Council President:
“Kazakhstan could contribute by acting as a “buffer market” between East and West, South and North” about “the deepening geo-economic fractures”.
The Novorossiysk oil terminal, which had initially been ordered to be suspended, is crucial for exporting Kazakh oil. Earlier, Kazakhstan had already branded its exports via Russian seaports to “Kazakhstan Export Blend Crude Oil (KEBCO)”, in a bid to avoid being affected by the sanctions on Russia. Kazakh oil producer CNPC-Aktobemunaigaz then explained the move as follows:
“Due to recent significant geopolitical changes … and to avoid the negative effect of the changes on Kazakh oil exports via Russian ports, from June 2022, the following name for the grade applies – KEBCO (Kazakhstan Export Blend Crude Oil)”.
Kazakhstan has declined to recognize the breakaway ‘Republics’ of Donetsk and Lugansk.
#Caspianpipeline fined in Russia, suspension lifted
CPC, which takes oil from Kazakhstan to the Black Sea via one of the world's largest pipelines, was last week ordered to suspend activity for 30 days, although exports were still flowinghttps://t.co/jFv6BMpSDV pic.twitter.com/HcYGiRGosw
— Tracy (𝒞𝒽𝒾 ) (@chigrl) July 11, 2022
In a comment, Bakhti Nishanov of the U.S. Helsinki Commission argues:
“The tension between Russia and Kazakhstan has now become a quiet yet easily observable conflict. Kazakhstan has been vocal in its support for Ukraine and president Tokayev told Putin to his face Kazakhstan won’t recognize the puppet states of DNR and LNR. Now Russia halted shipments of Kazakh crude to Europe through a pipeline that goes over Russia. Instead of placating, Kazakhstan said it’s committed to energy security in Europe and that it will look for alternative shipment methods.
Kazakhstan is also reportedly pulling out of a CIS committee that was looking at setting up a common currency, including with Russia. Largely symbolic at this point but if confirmed, a very pointed move. One of the outcomes of this war will be a more confident and muscular Kazakhstan.”