A pipeline failure on Russia's Black Sea coast stopped oil exports on Wednesday pushing crude prices higher and adding to fears that Moscow may disrupt energy supplies just as US president Joe Biden arrives in Europe to discuss the war in Ukraine.
European benchmark Brent North Sea crude oil jumped 4.6% to $120.73 per barrel before easing back to US$118.40 on Thursday.
A majority of the pipeline's flow comes from Kazakhstan, which is exempt from the US import ban.
Moscow-based Caspian Pipeline Consortium (CPC), which runs a pipeline linking Kazakh oil fields to Russia's Novorossiysk port, shut down all three loading units on Wednesday because of storm damage.
The consortium running the pipeline said the route may not be usable for two months because of storm-related infrastructure damage.
Most of the CPC's cargo is oil produced in Kazakhstan by companies like ExxonMobil and Chevron, as well as some Russian crude. Yesterday Chevron said exports from Tengiz were flowing uninterrupted.
About 1.2mln barrels a day go through the pipeline or 1.2% of global demand. Any disruption to its flows would contribute to the worst supply crunch since the Arab oil embargo in the 1970s.
CPC chief executive Nikolai Gorban told reporters on 23 March that the loading of oil at the Novorossiysk terminal had been halted.
The 1,500-kilometer pipeline, which starts at Kazakhstan's giant Tengiz field on the eastern shore of the Caspian, will see shipments drop sharply in March and April, he said.
Western companies' refusal to supply parts would also delay any repair work, he added.