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26 May, 2023 12:04

Major oil producer fears ‘apocalyptic’ impact of Russia sanctions

Kazakhstan’s energy exports are heavily dependent on transit through the sanctioned country, an envoy has said
Major oil producer fears ‘apocalyptic’ impact of Russia sanctions

The stability of oil supplies from Kazakhstan to the global market relies on transit through Russia, the country’s ambassador to the US, Yerzhan Ashikbayev, has stated. He added that any disruption to flows caused by sanctions could trigger a dire scenario.  

“We proceed from the mutual interest of all parties, the interest in the stability of the global market, in the stability of supplies. This is vital both for the functioning of our [Kazakh] economy and for the entire global economy,” the envoy told RIA Novosti on Thursday on the sidelines of the Trans-Caspian Forum in Washington.

When asked whether he sees any risk that sanctions could make it difficult or impossible for Kazakhstan to transit oil, the diplomat described it as “some kind of apocalyptic scenario.” 

Kazakhstan supplies oil to the global market via one of the world’s largest pipelines, the Caspian Pipeline Consortium (CPC). According to Ashikbayev, the CPC remains an important project for Kazakhstan, accounting for 80% of the country’s crude oil exports.

A multinational project, the CPC involves Russia, Kazakhstan and a consortium of leading oil companies. The pipeline system mainly collects crude from the large oil fields of western Kazakhstan, but also from Russia. Its total capacity is over 1 million barrels of oil per day, which is 2.3% of global seaborne crude trade.

The CPC delivers around 1.2 million barrels of crude oil daily from Kazakhstan to Europe, and for subsequent shipment to the US. The pipeline’s operations were interrupted last year by storm damage to equipment at a Black Sea terminal, with the disruption sparking concerns of a global supply crisis.

Kazakhstan has strengthened its oil and gas ties with Russia despite the threat of secondary sanctions from the US and EU.

For more stories on economy & finance visit RT's business section

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