The Caspian Pipeline Consortium’s crude terminal on the Black Sea, which is located within Russian territory yet imports almost all of its oil from Kazakhstan, has been temporarily shut down as per orders by a Novorossiysk court.
Russian authorities have reported a disturbance at the facility three times since the beginning of the invasion of Ukraine, even though the facility had been running more-or-less constantly for the preceding 20 years. In March this year the facility suffered an unusual storm damage to its single-point moorings, and in June a WWII-era UXO was unexpectedly discovered close to its underwater pipes. A few days after the president of Kazakhstan declared that he would not recognise two Russian-occupied areas in eastern Ukraine, there was another interruption.
These two incidents forced partial shutdowns at the CPC terminal, but at least one of three loading buoys remained in operation – until July 5, when a court shut the last one down on request from the Russian Federal Service for Supervision of Transport (Rostrasnadzor). The administrative suspension for alleged “documentary violations under the Oil Spill Response Plan” will last for 30 days.
The full shutdown follows two days after Kazakh President Kassym-Jomart Tokayev said that his nation is ready to send more oil to Europe and “to use its hydrocarbon potential to stabilize the situation in the world and European markets.” Tokayev’s pledge does not align with Russian interests: European nations are working hard to phase out Russian oil purchases and find reliable alternative suppliers – like Kazakhstan, a longtime trading partner.
Kazakhstan exports 80 percent of its oil via the CPC’s marine terminal in Novorossyisk; the majority goes to Europe. This has historically provided about six percent of the EU’s total crude imports.
Both sides of this exchange oppose Russia’s actions in Ukraine. Courts in Russia typically operate in alignment with state interests, and the Primorsky District Court’s decision to shut down the CPC loading terminal happens to apply economic pressure to both Kazakhstan and the EU when both are attempting to strengthen trade ties – all without hurting Russia’s own exports, noted Bloomberg analyst Julian Lee.
“The Caspian Pipeline Consortium acts within the legal framework of the Russian Federation and is forced to execute the court ruling. The ruling will be appealed in accordance with the procedure established by law,” said CPC in a statement.
