Russian court orders halt to Caspian oil pipeline but exports still flow

* This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine.

* CPC exports around 1.2 million barrels per day

* Pipeline's operations have been interrupted by storms

* Kazakhstan considers measures to tackle CPC restrictions

* CPC asks court to suspend the ruling enforcement

MOSCOW, July 6 (Reuters) - Caspian Pipeline Consortium (CPC), which takes oil from Kazakhstan to the Black Sea via one of the world's largest pipelines, has been told by a Russian court to suspend activity for 30 days, although exports were still flowing.

Tengizchevroil, the operator of Kazakhstan's largest oilfield Tengiz, said oil supplies via the CPC pipeline have not been interrupted.

Tengizchevroil, in which Chevron CXV.N holds a 50% stake, said that it has sought clarification from the CPC on details and next steps after the ruling.

Three industry sources also said oil supplies from the fields in Kazakhstan to the CPC pipeline were uninterrupted as of Wednesday morning.

CPC, which handles about 1% of global oil, said the ruling to suspend operations related to paperwork on oil spills and said the consortium, which includes Chevron and Exxon XOM.N , had to abide by Tuesday's court ruling.

Any major disruption to the CPC would put further strain on the global oil market which is facing one of its the worst supply crunches since the Arab oil embargo in the 1970s.

CPC said it had submitted an appeal to the court in the Russian Black Sea port of Novorossiisk requesting that the enforcement of ruling be suspended to avoid a stoppage that could lead to irrevocable consequences for the pipeline equipment.

CPC did not offer further comment when contacted by Reuters.

The CPC pipeline has been in the spotlight since Russia sent troops into Ukraine, in what it calls a "special military operation". Western sanctions imposed as a result have driven down Russian exports and pushed up oil prices.

Oil prices LCOc1 were up more than 1% on Wednesday at around $104 a barrel, supported by supply concerns.

Russia has already reduced gas flows via the Nord Stream 1 gas pipeline, which supplies Russian gas to Germany and other European states. That pipeline has been operating at 40% capacity because of a dispute over equipment repairs.


The United States has imposed sanctions on Russian oil but has said flows from Kazakhstan through Russia should run uninterrupted. The European Union, meanwhile, has said it wants to wean itself off reliance on Russian fossil fuels by 2027.

A terminal situation report seen by Reuters showed oil loadings from CPC terminal were continuing as of midday on July 5 but it was not clear if operations were continuing on July 6.

CPC said on Wednesday that Russian Deputy Prime Minister Viktoria Abramchenko ordered regulators, including industrial safety regulator Rostekhnadzor, to inspect the facilities of the Russian part of the consortium.

It said the inspection has found some "documentary" irregularities on plans on how to tackle oil spills. An oil spill occurred at the terminal last year.

Kazakhstan said the government was discussing measures to tackle the impact of restrictions on oil exports via the CPC.

The pipeline exported up to 54 million tonnes, or some 1.2 million barrels per day, of Kazakhstan's main crude grade, light sour CPC Blend BFO-CPC , last year from the Black Sea.

The pipeline's operations have already been interrupted by storm damage to the Black Sea's terminal equipment this year.

Separately, Kazakhstan police said there was an explosion at the giant Tengiz oilfield, the main source of oil for the CPC, killing two workers, Interfax news agency reported.

The operator said that production at the field was continuing after the accident.

FACTBOX-Russian court suspends oil flows through Caspian

Reporting by Reuters bureaux, additional reporting by Ron Bousso in London; Editing by Edmund Blair, Guy Faulconbridge and Jane Merriman

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.