Page 4 - FSUOGM Week 33 2022

FSUOGM COMMENTARY FSUOGM

Kazakhstan eyes alternatives

to Russian oil transit

The government in Nur-Sultan is looking to reduce reliance on Russia as a
transit route by advancing plans to ship its oil across the Caspian Sea to

Azerbaijan

KAZAKHSTAN KAZAKHSTAN expects to start dispatching announcement on July 4 that his country was
oil supplies to Western markets next month via prepared to send more oil to Europe to support
WHAT: Azerbaijan’s biggest oil pipeline, Baku-Tbili- its energy security, at a time when the EU is pre-
Kazakhstan wants to si-Ceyhan, in order to reduce its dependence on paring to enforce an embargo on Russian oil
ship more oil across Russia as a transit option, sources told Reuters imports later this year.
the Caspian Sea to on August 12.
Azerbaijan. For two decades Kazakhstan has relied to a Diverting supplies away from Russia
large decree on the Caspian Pipeline Consortium Reuters cited sources as saying that Kazakh-
WHY: (CPC) pipeline that runs through Russia to the stan’s state-owned oil company Kazmunaigaz
Kazakhstan wants to Black Sea coast to shift its exports to market. But was in advanced talks with the trading arm
reduce reliance on since Russia began its invasion of Ukraine, these of Azerbaijan’s SOCAR to allow up to 1.5mn
Russia as a transit supplies have suffered several disruptions. And tonnes per year (30,000 bpd) of Kazakh oil to be
route following CPC in July, a Russian court threatened to shut the delivered across the Caspian Sea to Baku, which
disruptions. CPC conduit down completely, citing environ- it could be loaded into the under-utilised BTC
mental violations. That decision was ultimately pipeline. A final contract is due to be signed at
WHAT NEXT: reversed, but analysts have linked it to height- the end of this month, with supplies commenc-
While these steps may be ened tensions between Moscow and Nur-Sultan ing a month later.
prudent, the majority of over the latter’s lack of support for the Russian At this level, the volume under discussion
Kazakh oil will still flow position on Ukraine. is only a small fraction of the 1.3-1.4mn bpd of
through Russia to reach In particular, Moscow may be irked by oil that currently flows through the CPC sys-
its market. Kazakh President Kassym-Jomart Tokayev’s tem. But another 3.5mn tonnes (70,000 bpd)

P4 www. NEWSBASE .com Week 33 17•August•2022