Crude Oil Grades Get Boost From Disrupted Flows in Kazakhstan

During the session, Brent crude futures traded at $75.22 a barrel after chalking up 48 cents as the US West Texas Intermediate (WTI) crude futures closed at $71.39 per barrel after gaining 65 cents.

Drones struck the Kropotkinskaya pipeline pumping station in Russia’s southern Krasnodar region, reducing oil flows from Kazakhstan to world markets by Western producers.

Ukrainian drones have repeatedly targeted Russian energy infrastructure in recent months, including in the Krasnodar region, but Monday’s attack would be the first on facilities involving Western oil majors.

The Caspian Pipeline Consortium (CPC) pipeline is the main export route for Kazakhstan, which supplies about 1 per cent of the world’s oil.

The company, however, noted that there were no injuries to the personnel at the pumping station and the response team managed to prevent a possible oil spill.

Kazakhstan’s oil exports via Russian infrastructure and passing through Russian territory are not subject to Western sanctions on Russia’s oil exports.

The drone attack comes as the US and Russia prepare to hold talks in Saudi Arabia on Tuesday to discuss ending the war in Ukraine, without the participation of Ukraine.

This could ease sanctions and increase global supplies.

The price boost also came as the Dollar index dropped after weaker-than-expected US retail data for January, making crude less expensive for non-US buyers.

The Organisation of the Petroleum Exporting Countries and allies, including Russia (OPEC+) said it does not plan to delay a series of monthly oil supply increases scheduled to begin in April.

Bloomberg News reported on Monday, citing delegates, that OPEC+, was examining whether to postpone the supply increases, despite calls from US President Donald Trump to lower oil prices.

However, Reuters reported that the oil market may be able to absorb extra supply from April as a result of tougher sanctions and higher Chinese demand.

OPEC+ had said earlier this month that it would not change its current plan to begin gradually unwinding the cuts from April.

At the previous ministerial gathering in December, the alliance decided to delay the start of the easing of the 2.2 million barrels per day cuts to April 2025, from January 2025. The group also extended the period in which it would unwind all these cuts into the following year, until September 2026.