Traffic resumes after drone attack at strategic Russian oil port Novorossiisk

Tanker movements resumed Aug. 4 at the Russian Black Sea oil port of Novorossiisk after being suspended for several hours due to a drone attack on nearby naval ships, the Caspian Pipeline Consortium said, in what appeared a broadening of the Russia-Ukraine conflict to affect a major hub for Russian and Kazakh exports.

Ukraine's authorities have not claimed responsibility for the attack, which, however, follows signs of an escalating maritime conflict stemming from the Russian invasion of Ukraine. In light of the war, Kazakhstan has been trying to increase its shipments of crude via alternative routes, sending more crude across the Caspian and through the Baku-Tbilisi-Ceyhan pipeline, but its needs far outstrip what that route can handle.

Russia's defense ministry said it had successfully repelled the attack by two maritime drones on a naval facility, preventing damage or injuries. However, there were also unconfirmed reports from independent media of damage to a large naval landing ship, which was said to be listing to one side.

The Caspian Pipeline Consortium, which comprises Russian and Kazakh state entities and major oil companies, said the attack had occurred "near the operational area of the CPC Marine Terminal" and tanker movements had been temporarily suspended, although loadings continued, and there was no damage to infrastructure.

The CPC consortium loads around 1.5 million b/d of mainly Kazakh crude from a number of floating facilities off Novorossiisk, while Russian Urals crude oil and products are loaded in the port itself.

A later CPC statement confirmed the resumption of traffic. At 10:39 am Moscow time (0739 GMT), "the ban on ship movements in the port of Novorossiisk was lifted," the consortium said.

Operations had also returned to normal at the main loading facilities for Russian-origin oil, shipping sources said, with ship tracking software showing the tanker Troitsky Bridge leaving the terminal area.

Novorossiisk is the main route for Kazakhstan's crude exports, which unlike Urals are light and relatively low in sulfur.

The country's flagship CPC Blend crude is not subject to sanctions against Russia, due to Kazakhstan not being involved in the war, despite the oil loading in a Russian port.

CPC Blend was assessed by Platts, part of S&P Global Commodity Insights, at a $1/b discount to Dated Brent on Aug. 3.

Black Sea tension

Novorossiisk is usually the third or fourth largest port for Russia's own crude exports, shipping 423,000 b/d in July and 607,000 b/d in June, according to S&P Global Commodities at Sea data. Around 300,000-400,000 b/d of Russian oil products were also shipped from the port in June-July, the data shows.

A spokesperson for Chevron, which is Kazakhstan's largest single foreign investor, with stakes in two of the country's largest oil fields, said the company continued "monitoring the situation in the area."

"CPC is a key export route for crude oil production from Kazakhstan to reach international markets and many countries rely on this critical transportation system for their energy security," the spokesperson added.

Brent front-month futures prices were up around 30 cents following the Novorossiisk attack at $85.48/b, likely also reflecting the latest production cut extensions announced by Russia and Saudi Arabia.

Tensions in the Black Sea have risen since Russia pulled out of the Black Sea Grain Initiative, intended to ensure grain supplies to international markets, on July 17.

Recent weeks have seen increased Russian attacks on Ukrainian ports on the Danube in the far west of the country by the Moldovan and Romanian borders.