Previously, Reuters released news that Kazakhstan expects to sell a portion of its oil through Azerbaijan's oil pipeline starting in September. At that time, I was thinking, is it possible to achieve? With this question in mind, let's analyze it.
I don't like to talk at length, it's simple and clear, I believe everyone can see it.
Oil
Kazakhstan's crude oil exported through the CPC (Caspian Pipeline Union) is CPC blend, a typical light sulfuric crude oil, while the oil exported by Azerbaijan through the BTC (Baku-Tbilisi-Ceyhan) pipeline is medium-quality low-sulfur crude.
How to say it? In a word, the latter is less difficult to refine and the price is higher.
Crude oil produced by Kazakhstan and Russia is this kind of light sulfuric crude oil, and there is no price difference in transportation through oil pipelines, and if it is to pass through this pipeline in Azerbaijan, how to deal with the price problem? This is the biggest problem, Azerbaijan can not reduce the price of its own oil exports for the sake of Kazakhstan's crude oil exports.
Shipping costs
Originally, Kazakhstan transported oil from atyrauTianjiz, the largest oil field in the country, directly with crude oil from russia to the Black Sea port in Novorossiysk, Russia, through CPC, and then loaded and shipped out.
Now, if a delivery deal is reached with Azerbaijan, Kazakhstan needs to first barrel crude oil, transport oil to Baku on small tankers, and then transport it through pipelines to the Turkish port of Ceyhan. This invisibly increases the cost of transporting a small tanker, which is not very cost-effective for Kazakhstan Oil, which is already relatively low-priced.
flow rate
If the crude oil produced by Kazakhstan arrives in Baku, there are two lines to transport the crude oil, one is the Aforementioned BTC line, through which almost 30,000 barrels of crude oil are intended to be transported per day, in Kazakh terms.
Another route is transported through Baku to the port of Supsa on the Black Sea coast of Georgia, and then loaded into ships again, this line can be transported about twice as much as BTC because of the relatively short pipeline transportation distance.
In this way, Kazakhstan can export about 100,000 barrels of crude oil per day through the azerbaijani pipeline, but this transportation volume is almost worthless compared to the previous Caspian Union pipeline, which can transport more than 1.3 million barrels of crude oil per day.
What's more, there are the issues of oil prices and transportation costs mentioned earlier, and it is almost impossible to break Russia's oil transportation "monopoly" through this channel, at most it is to increase an output path. With Russia sanctioned today, Kazakhstan has one more way to sell oil without a big economy at home.
Find another way
Rail transport lines, that is, by rail to the port of Batumi in Georgia, and then loaded into ships and transported out. But those who are familiar with the traffic situation over there know that such transportation is very small. Even if you order a few more railway lines, it is far from pipeline transportation, and the time is relatively long, and there is really no way to take such an approach. For example, some time ago, on July 6, Russia temporarily closed the CPC crude oil pipeline, and the joint venture between Kazakhstan's state oil company and its domestic oil giant Chevron, TCO, found a railway line to transport.
While such restrictions on the CPC pipeline may have a relatively small impact on global oil trade, the shutdown is fatal for Kazakhstan, where nearly 80 percent of crude oil is sold through the pipeline. In the first five months of this year, Kazakhstan exported 23.76 million tons of crude oil through this route, accounting for 83% of the country's total crude oil exports.
It should be known that the oil and gas industry is the pillar industry of kazakhstan's national economy, oil and gas exports account for 60%-70% of its foreign exchange earnings, a large proportion, if this pipeline problem occurs again, it can be seen that the economy may collapse immediately. For example: in 2020, Kazakhstan produced 85.7 million tons of oil, consumed very little on its own, exported 68.5 million tons, and earned $23.7 billion in export revenue.
This may be because of the impact of the epidemic, you know, in 2019, Kazakhstan's oil export revenue was a staggering 33.6 billion US dollars, such a large income for this Central Asian country, but a lot of money.
Tokaev broke the game?
If it were not for the Russian-Ukrainian conflict, Tokayev might not have thought of making these things, but the country's economic income is a big thing, and as the president of a country, he has an unshirkable responsibility.
So while Russia is being sanctioned, he must also help his oil companies find a way out, right? But because of many previous restrictions, it seems that a suitable way has not been found, as a Kazakh country, at this critical moment, it is a little bit, otherwise there may be chaos in the country.
Of course, you may also mention another oil route, that is, the Atyrau-Samar crude oil pipeline, but the middle point of this line is still Russia's Samar, after the oil is transported here, either into the Russian oil pipeline, the oil is transported to Europe, or it is transported to Odessa, Ukraine and Novorossiysk, Russia, and then transported to Europe by oil tanker, and finally, Kazakhstan's oil transportation still did not bypass Russia.
As for the other one, that is, the China-Kazakhstan pipeline, which has nothing to do with Russia.
Therefore, the things that everyone talked about about Tokaev and Russia 'stalemate' are really unlikely!
No, these two presidents have been discussing the comprehensive economic and trade cooperation between the two countries in the past two days! So don't worry, President Tokayev is just looking for one more way out of the oil, and there's no way to bypass Russia completely.
Finishing Author: Oh Ya Jun
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