Kazakhstan's Oil Production Drops by 21 Percent Following CPC Suspension

Kazakhstan's oil production decreased by approximately 21 percent on 22 July following the Caspian Pipeline Consortium's (CPC) suspension of loadings at its Black Sea Novorossiysk terminal due to tanker attacks. In a report attributed to an industry source by Reuters, it was stated that the country's daily oil and gas condensate production fell from the July average of 2.07 million barrels to 1.63 million barrels.

The sharpest drop in production occurred at Tengiz, operated by Chevron and the country's largest oil field. Production at Tengiz shrank by 56 percent, dropping from a daily 925,000 barrels to 406,000 barrels, demonstrating how quickly the field was affected by the halt at the Novorossiysk terminal, located approximately 1,500 kilometers away. The Ministry of Energy of Kazakhstan confirmed that producers made cuts because CPC paused receiving deliveries and storage tanks were approaching capacity.

This production cutback coincides with a period when tanker navigation in the region is jeopardized due to attacks, negatively impacting global oil supply. The suspension of loadings by CPC as a result of successive unmanned aerial vehicle attacks on the marine terminal in Novorossiysk is expected to severely affect Kazakhstan's oil export revenues. The price per barrel of Brent oil rose above 100 dollars after similar attacks in the Red Sea and the Strait of Hormuz triggered global supply concerns.