NUR-SULTAN – The U.S. embargo on Russian oil will not affect the Caspian Pipeline Consortium that delivers Kazakh oil to global markets via Russia, said the U.S. Department of Treasury.
On Tuesday, U.S. President Joe Biden banned the import of Russian oil, liquefied natural gas, and coal to the United States, among other measures taken to punish Russia, the world’s second-largest crude oil exporter behind Saudi Arabia, for its actions in Ukraine.
“Distribution systems such as those within the CPC can segregate various sources of crude oil, allowing crude oil that is not of Russian Federation origin to be marketed and loaded separately. The importation prohibition of E.O. (referring to an executive order) of March 8, 2022, applies to the import of certain products of Russian Federation origin to the United States and excludes imports that are not of Russian Federation origin, even if such items transit through or depart from the Russian Federation,” said the U.S. Department of Treasury.
Kazakhstan’s KazMunayGas owns nearly 20 percent of shares in the CPC that ships around 1.2 million barrels per day of oil, 1.2 percent of global supply. The pipeline is one of the priority export pipelines for Kazakhstan’s oil from its major Tengiz field which makes Kazakhstan wary of potential repercussions for its oil exports.
The U.S. ban has already sent oil prices soaring – Brent price settled at $129.95 and WTI at $122.5.
“After intensive around-the-clock coordination and consultation by President Biden, the International Energy Agency (IEA) member countries agreed to a collective release of an initial 60 million barrels of crude oil from our strategic petroleum reserves, with the United States committing half of that in the emergency sale. We are in conversations with a range of energy producers and consumers on further steps we can take to ensure a stable global supply of energy,” said a White House statement from March 8.