Oil gains after Ukrainian drone hits oil pumping station
Oil prices gained after Ukrainian drones hit a major Russian oil pumping station of a pipeline, temporarily disrupting crude oil flows from Kazakhstan.
PHOTO: Crude oil pipelines connected to an oil refinery. Getty Images
Several drones struck PS Kropotkinskaya yesterday. That is the oil transportation facility of Russia-based pipeline operator Caspian Pipeline Consortium (CPC). The facility is located in the Kavkazsky district of southern Russia and has temporarily been shut due to the attacks, CPC said.
The news has put upward pressure on Brent crude’s price, according to market analysts. Brent gains were “largely spurred by a drop in Kazakhstan’s crude exports caused by a Ukrainian drone strike,” VANDA Insights’ founder and analyst Vandana Hari said.
CPC operates the pipeline, which runs from the Caspian coast in northwest Kazakhstan to the Novorossiysk port on Russia’s Black Sea coast. It transports over two-thirds of all oil exports from Kazakhstan, and crude from Russian oil fields, including those in the Caspian Region.
“Crude transportation through Tengiz-Novorossiysk pipeline system is being maintained at reduced flow rates, bypassing the PS [Kropotkinskaya pumping station],” CPC said.
The drone strike came one day before US Secretary of State Marco Rubio's meeting with Russian Foreign Minister Sergei Lavrov in Saudi Arabia to discuss a possible ceasefire in Ukraine.
Notably, Kazakhstan's oil exports, which rely on Russian infrastructure and transit through the Russian territory, remain unaffected by Western sanctions imposed on Russia's oil exports.
By Aparupa Mazumder
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