Exclusive: Kazakhstan renames its export oil to avoid Russia sanctions risk

A view reveals an oil effectively pump jack, set as an set up in entrance of the Tengizchevroil LLP workplace within the metropolis of Atyrau, western Kazakhstan, December 7, 2016. REUTERS

June 3 (Reuters) – Kazakhstan is altering the title of the oil it exports by way of Russian sea ports to Kazakhstan Export Mix Crude Oil (KEBCO) to dissociate it from oil originating in Russia as a way to keep away from sanction dangers and points with financing.

“As a consequence of current vital geopolitical adjustments … and to keep away from destructive impact of the adjustments on Kazakh oil exports by way of Russian ports, from June 2022 the next title for the grade applies – KEBCO (Kazakhstan Export Mix Crude Oil)”, Kazakh oil producer CNPC-Aktobemunaigaz that transits its oil by way of Russian ports mentioned in a written reply to Reuters request.

4 sources in Kazakhstan’s oil corporations concerned in transit by way of Russian sea ports additionally confirmed the renaming of their barrels and added that the change to KEBCO will come into impact from Monday for all official paperwork.

In line with one supply, the Kazakhstan Vitality Ministry goes to ask for authorisation from the federal government for the official utilization of the brand new grade.

The Vitality Ministry declined to touch upon the matter.

Russian export mix crude oil (REBCO) or Urals, Russia’s flagship crude oil loading from the state’s western ports, has lately grow to be tough to position, particularly with European patrons, as a result of Western sanctions and self-sanctioning by European corporations. Earlier this week the EU introduced an embargo on Russian oil imports from end-2022. learn extra

Kazakhstan makes use of Russian sea ports as a transit route for 20% of its export oil circulate, some 13.3 million tonnes in 2021, whereas oil originated from Kazakhstan is technically not topic to Western sanctions. Kazakh shipments have been repeatedly mistaken for Russian barrels, merchants mentioned.

“It is a vital measure, in order that our oil shouldn’t be sanctioned, whereas its title clearly reveals the nation of origin within the paperwork. In any other case we now have issues opening letters of credit score,” a dealer concerned in Kazakhstan’s oil transit by way of Russian ports instructed Reuters.

Kazakh oil producers hope they will obtain higher costs for his or her oil and promote it simpler if it is clearly acknowledged within the paperwork it doesn’t come from Russia, the sources mentioned.

The Urals oil low cost to dated Brent fell to all-time low of greater than $30 per barrel from the tip of March.

Enhancing by David Evans

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