A court in southern Russia on Monday overturned an earlier ruling suspending Caspian Pipeline Consortium's (CPC) operations and instead fined it 200,000 roubles ($3,300), easing concerns about a global oil supply crunch.
A halt to the pipeline, which carries oil from Kazakhstan's vast Tengiz Field across Russia to the Black Sea, would have strained the oil market and increased tensions between Russia and Kazakhstan, which has little leeway in re-routing its oil exports from CPS.
U.S. oil majors Chevron and Exxon are among the consortium's largest shareholders. "Having considered the materials, having heard the arguments of the parties, the appellate court modified the decision of the district court and handed (CPC-R) a penalty in the form of an administrative fine of 200,000 roubles," the court's ruling said, referring to CPC's Russian subdivision.
In a statement following the ruling, CPC said that immediately suspending the pipeline, which handles around 1% of global oil, would have been technically impossible and caused "irreversible consequences".
