Kazakh oil sells at record discount

Kazakhstan’s CPC Blend crude exported via the Caspian Pipeline Consortium (CPC) is being sold on foreign markets at discounts of up to $5 per barrel. This marks the worst level since late 2022, Reuters reported.

The lower price made CPC Blend more attractive to buyers, which led to a rise in demand, meaning the discounts did not last long. The price drop was largely caused by key buyers temporarily switching to other crude grades due to concerns about supply disruptions.

In recent months, shipments of Kazakh oil via the CPC have been halted several times. The interruptions were caused by Ukrainian drone attacks, adverse weather, repairs at the loading terminal, and reduced production following a generator fire at the Tengiz field in January.

According to Reuters, oil exports from the Tengiz field in February may reach only 35 percent of the planned volume, contradicting earlier statements by Energy Minister Erlan Akkenzhenov that production would be fully restored by early February. In January, total export volumes were about half of the planned level.

Due to disruptions in CPC deliveries, part of the oil produced at the Kashagan field was directed to the domestic market for the first time in January. Normally, about 80 percent of Kazakhstan’s oil exports pass through the CPC pipeline, which transports crude from the Tengiz, Kashagan, and Karachaganak fields.

Earlier, reports also said that tankers carrying Kazakh oil had come under attack.

E’zoza Olimova