The news of the outage raised US oil prices by 5.2% and settled at $ 114.93 a barrel. Brent crude, the world benchmark, was up 5.3% to $ 121.60 a barrel. The Caspian Pipeline Consortium, a system that transports oil from oil producers in West Kazakhstan and Russia to the Black Sea, said in a statement Tuesday that inspections revealed damage to the Marines. Terminal. The group said some businesses were temporarily suspended due to repairs. According to Russian state news agency TASS, Russian energy officials could take six weeks to two months to repair a marine terminal near the port of Novora Siska in the Black Sea on Tuesday, with oil exports about about per day. He said it could save one million barrels.
“This is a pretty serious time frame,” said Pavel Sorokin, Russia’s Deputy Minister of Energy, by TASS. He added that the storm damaged at least one of the three oil loading facilities and the assessment is underway.
The Russian government and Chevron own shares in the Caspian Pipeline Consortium, which carries oil from the landlocked country of Kazakhstan.
In a statement, Chevron said, “We are currently assessing the situation,” and further contacted the Pipeline Consortium.
“This is a huge supply shock,” said Rabobank energy strategist Ryan Fitzmorris.
“Dangerous” bullish
The suspension of the Caspian Sea has increased concerns about oil supplies from the region following Russia’s invasion of Ukraine and Western sanctions on Moscow. These penalties have made the energy, shipping and financial industries nervous about handling Russian barrels.
“We’re getting more and more bullish on the supply side, which is dangerous,” Fitz Maurice said.
The energy market is at stake. Brent crude has skyrocketed 24% since closing at $ 98.02 a barrel on March 16, but is still shy at the recent peak near $ 139 a barrel set earlier this month.
The turmoil is caused by the serious turmoil in Russia’s economy and little progress in the invasion of Ukraine. Analysts have previously warned that Russia could weaponize oil by deliberately withholding supplies to punish the West.
“Timing is interesting, to say the least,” Fitz Maurice said.
US Secretary of Energy Jennifer Granholm reiterated her recent call to use it to increase domestic production of fossil fuels, referring to the shutdown of the Caspian Sea pipeline in a speech Wednesday.
“What does this tell us about our role in creating a future of safe energy that will not be under the control of Putin or a country that is disadvantageous to us?” Gran Holm spoke at an International Energy Agency event in Paris. “On our side, we have delivered a clear message to domestic oil and gas companies. We now want the industry to increase production anytime, anywhere as much as possible.”
After Russia invaded Ukraine, Chevron (CVX) said in a phone call with reporters on March 1 that the only actual exposure to Russia was through the Caspian Sea pipeline system. Chevron CEO Mike Worth has expressed his confidence that oil will continue to flow through important arteries.
“There was no sign from the government that the Caspian Pipeline Consortium could be disrupted,” Worth said.
— CNN’s Chris Liakos contributed to this report.