Commentary: Nothing to lose, lots to gain for Russia in keeping up uncertainty over energy

LONDON: Russia is going to keep creating uncertainty over shipments of oil, gas and agricultural commodities onto world markets. It has nothing to lose and lots to gain.

So don’t get complacent about recent developments that might suggest Russian President Vladimir Putin is walking back from disrupting energy, food and fertiliser flows. He isn’t.

In the past couple of weeks, a Russian court threw out the 30-day suspension of shipments through the Caspian Pipeline Consortium’s (CPC) conduit that carries mostly Kazakhstani crude to an export terminal on Russia’s Black Sea coast.

The suspension would have removed as much as 45 million barrels of crude from global supplies, with a value of more than US$4.5 billion. But the fine imposed on the company in place of the suspension was a mere 200,000 rubles, equivalent to US$3,200.

The successful appeal was undoubtedly a victory for the pipeline company and a relief for European refiners. But for the government of Kazakhstan and the foreign oil companies operating there, the threat of future disruption hasn’t gone away.

FEARS NORD STREAM GAS FLOWS WOULDN’T RESTART HAVE BEEN ALLAYED FOR NOW

Flows through the CPC system have already been interrupted twice since Russian troops invaded Ukraine on Feb 24. In late March, the terminal was partially shut for a month after a storm reportedly damaged two of the three loading buoys.

Then in mid-June, loadings were again suspended from two moorings for a survey of the surrounding water area, which led to the discovery of a number of World War II mines. A sceptic might have expected mine removal to have been a priority when the buoys were first installed.