CPC disruption adds Kazakh export risks to global oil supply concerns Report

Insight 28 March 2022

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Report summary

Storm damage at the Caspian Pipeline Consortium (CPC)’s Black Sea terminal in Russia has taken at least half of the oil pipeline’s 1.6 million b/d capacity offline. This casts uncertainty on almost 1% of global liquids supply. The CPC may end in Russia, but it is landlocked Kazakhstan’s dominant oil transport route, including all exports from its three Majors-led upstream megaprojects. To Kazakhstan’s relief, tanker loadings have resumed from an undamaged single point mooring. But a short-term production constraint is already apparent. Alternative oil export routes cannot make up for the lost CPC capacity. Especially at short notice. We assess the repercussions for the Kazakh upstream sector and the wider oil market: • What is the cause and scale of the outage? • How reliant is Kazakh oil supply on the CPC? • Who buys CPC volumes and which other crudes could substitute for it? • What are the alternative routes for Kazakh exports that avoid Russia transit?

Executive summary
What is the cause and scale of the outage?
- Worst case scenario avoided, but partial downtime to last more than a month
How reliant is Kazakh oil supply on the CPC?
Who buys CPC volumes and which other crudes could substitute for it?
- A torrid month for CPC blend and other crudes out of Russian ports
What are the alternative routes for Kazakh exports?
- Transit across Caspian Sea from Aktau port to Azerbaijan
- Export to China
A reminder of the perils of concentrating risk on a single offtake route

Tables and charts

This report includes 7 images and tables including:

CPC terminal - average loadings by week
Kazakh oil and condensate in 2021 by sales route
CPC terminal exports by upstream source

CPC pipeline and Kazakh oil export infrastructure
CPC and Urals oil blends - average monthly price differential to North Sea dated
BTC pipeline availability
Kazakhstan-China Oil Pipeline (Atasu-Alashankou section) availability