• Kazakhstan will send up to 30% more crude west through the BTC pipeline due to drone damage on the CPC route in Russia.
• Kyiv continues to view Novorossiysk and CPC assets as legitimate targets, despite Kazakh calls for restraint.
• A pending OFAC ruling on Russian oil transit to China could force Kazakhstan to halt shipments that currently yield $150 million in annual fees.

Kazakhstan will be shipping up to 30 percent more oil westward via the Baku-Tbilisi-Ceyhan pipeline starting in December, compared to November, the Reuters news agency reported, citing industry sources. 

The shift can be attributed to recent Ukrainian drone attacks on Caspian Pipeline Consortium facilities in and around Novorossiysk, Russia. The CPC route, which handles the bulk of Kazakhstan’s oil exports, has experienced significant damage, interfering with regular oil tanker shipments.

Kazakhstan has called on Ukraine to refrain from attacking the CPC. Kyiv, meanwhile, has not committed to doing so, calling the Novorossiysk port and the CPC pipeline legitimate military targets consistent with the “right of self-defense.”

Meanwhile, Kazakhstan is awaiting a determination by the US Treasury on whether Russian oil exports to China via Kazakh territory violate sanctions. 

Kazakh officials say they are prepared to cut off the shipments if they are ruled in violation of sanctions by the Treasury Department’s Office of Foreign Assets Control (OFAC), according to local media reports. The Russian state-controlled entity Rosneft ships about 10 million tons of oil annually to China. Kazakhstan reportedly earns $150 million in transit fees. 

China reportedly has sought to increase the annual volume of oil imports by 2.5 million tons per year, utilizing the Atasu-Alashankou oil pipeline. An increase in volume reportedly would require updates to transit facilities at the Russian-Kazakh border.

By Eurasianet

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