(Jan 12): Kazakh crude exports from a key port in the Black Sea have been slashed again as bad weather, maintenance and drone damage cut the nation’s loadings, driving up the price of those barrels.
Caspian CPC Blend shipments will now be between 800,000 to 900,000 barrels a day this month, around 45% below the loadings that were anticipated in mid-December, traders who monitor cargo loading said. CPC handles the vast majority of Kazakhstan’s shipments plus a small amount of Russian supply. For Kazakh-origin oil, a total of at least 21 cargoes have been cancelled from the 45 shipments originally scheduled.
Much of the crude market’s attention this year has been focused on Venezuela — where the oil-producing country’s president was captured by US forces — and unrest in Iran. However, the mooring issue at CPC has had a more tangible impact on supply, impeding Kazakhstan’s ability to pump oil because the country is unable to export all the barrels it pumps via other routes.
The reductions follow persistent disruption at the Black Sea terminal. Bad weather has repeatedly halted operations over the past few weeks, delaying the return of a second mooring from maintenance and leaving just one facility working intermittently. Another mooring was damaged by drones in late November — an act that Kazakhstan blamed on Ukraine — something Kyiv did not deny. Kazakhstan needs two operational CPC moorings to maintain full production levels, with the third acting as backup.
The CPC pipe system has stopped once again receiving oil because of how full its storage tanks have gotten, the people said.
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Kazakhstan pumped about 1.8 million barrels a day last year, according to secondary source data compiled by the Organization of the Petroleum Exporting Countries. The nation’s capacity to consume and to export via routes other than CPC comes to about half that amount, meaning that protracted curbs can hit output.
The disruption tightened availability of CPC Blend crude, pushing differentials into positive territory for the first time over a year, traders said. One such cargo recently traded at a premium of as much as US$1.20 a barrel to Dated Brent, while most discussions were at 60 to 80 cents above the benchmark.
CPC declined to comment.
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About 90% of CPC volumes typically originate in Kazakhstan. Russian barrels usually account for roughly 150,000 barrels a day, though those flows have dropped sharply since drone attacks damaged Lukoil facilities in the Caspian Sea.
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