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Kazakh oil exports cut by Russian order amid OPEC+ dispute

Russia has ordered Kazakhstan’s main oil terminal to shut down two of its three moorings. The terminal handles crude pumped from the U.S. by majors Chevron, Exxon Mobil and others. This comes amid a standoff with OPEC+ and Kazakhstan over excessive production.

The operator of the Caspian Pipeline Consortium, which exports about 1% of the global oil supply through the Russian Black Sea Terminal, announced late on Monday that two moorings had been halted after a quick inspection by Russia's transportation watchdog.

Trading sources said that if the stoppage lasts more than one week, it could more than half CPC exports.

Kazakhstan has often exceeded its production quotas as part of a pact between OPEC+ producers. This includes the Organization of Petroleum Exporting Countries (OPEC) and other allies such as Russia.

It is difficult for the government to convince companies that operate its largest oilfields, which have invested tens and tens billions in expanding capacity, to reduce production.

Kazakstan's Energy Minister resigned last month following tough discussions about OPEC+ Compliance.

CPC stated that the closures of moorings were a result of an inspection conducted by Russia's Transport Watchdog. This allowed the company to correct "violations".

CPC has not specified the nature of the violations or how long they are expected to last.

The inspection was prompted, it said, by an oil spill that occurred after the sinking of the Russian tanker Kerch Strait back in December.

Tengizchevroil (owned by Chevron) which operates Kazakhstan’s Tengiz giant oilfield did not respond to an immediate request for comment.

The Kazakhstani energy ministry did not respond to an immediate request for comment.

In the past, Russia closed CPC's moorings citing technical problems. In 2022 and 2023, operations were suspended due to storms and damage. This affected CPC exports as well as the output of Kazakhstan.

According to CPC, and the Russian pipeline monopoly Transneft, in February, an Ukrainian drone attacked a pumpingstation along the pipeline that served the terminal.

Reports indicate that the pipeline was set up to export 1.7 millions barrels per day, or about 6.5 million tons of metric tonnes, in April.

In 2024, it is expected to export more than 63 millions metric tons (1,4 million bpd).

Transneft (24%), KazMunayGas (9%), and Exxon Mobil are also major shareholders. (Reporting and editing by Jason Neely).

(source: Reuters)