Russia: The “block” on the Kazakhstan oil pipeline has been lifted

A Russian court overturned a decision to suspend operations of the Caspian Pipeline Consortium (CPC), instead imposing a fine of 200,000 rubles ($3,300), allaying fears of a global oil supply crisis.

As Reuters points out, a possible shutdown of the pipeline, which carries oil from Kazakhstan’s vast Tengiz field to the Black Sea via Russia, would have strongly pressured the oil market, increasing tensions between the two countries, as Kazakhstan has little margins in the rerouting of oil exports.

It is also worth noting that the American oil companies Chevron and Exxon are among the largest shareholders of the consortium.

“The appellate court modified the decision of the district court and imposed a penalty in the form of an administrative fine of 200,000 rubles,” reads today’s decision.

A Russian court last week ordered CPC, which transports oil from Kazakhstan to the Black Sea through one of the world’s longest pipelines, to suspend operations for 30 days, citing oil spill concerns.

A move that raised concerns that oil shipments through the pipeline could be completely disrupted.

In a statement after the first decision, the CPC had said that an immediate shutdown of the pipeline, which carries about 1% of the world’s oil, would be technically impossible and would have “irreversible consequences”.

Tengizchevroil, the operator of Kazakhstan’s largest oil field, Tengiz, said last week that oil flows through the CPC pipeline were continuing despite the decision.

For his part, Kazakhstan’s President Kassym-Jomart Tokayev had on Thursday ordered his government to diversify the country’s oil flow routes amid fears of a pipeline blockage.