Ukraine announces halt to strikes on CPC terminal after US-mediated talks
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Ukraine said it will no longer target the Caspian Pipeline Consortium (CPC) terminal near Novorossiysk and non-Russian tankers, following US-brokered negotiations. The commitment aims to restore Kazakh crude exports that were disrupted by drone strikes in July. The move comes as global oil markets face pressure from the Iran conflict and disruptions in the Strait of Hormuz.
The US-Mediated Deal
Ukraine established contact points for commercial shipping safety after talks between senior US and Ukrainian officials. The agreement exempts vessels not under Russian ownership, not carrying Russian cargo, and not subject to Ukrainian sanctions. Kyiv is also providing shipping companies with instructions on which ships are excluded from targeting.
CPC’s Critical Role
The CPC terminal handles about 2% of global crude supply and is vital for Kazakhstan, which lacks alternative export routes. Exports of CPC Blend are expected to drop by roughly a third this month after drone attacks on July 20 and July 29 repeatedly halted loadings. The terminal is also a key supply source for European refineries.
Market Repercussions
Freight rates soared: daily earnings for tankers on the CPC-to-Mediterranean route surpassed $400,000, an all-time high according to the Baltic Exchange. Rising crude and fuel costs are pressuring the global economy and driving up US pump prices ahead of November midterm elections, where economic concerns are a focal point.
What's Next
It remains unclear whether the agreement will fully restore normal export volumes, as past safety assurances proved insufficient. The deal’s effectiveness will be tested as loadings resume, with the industry watching for any further disruptions.
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Ukraine announces halt to strikes on CPC terminal after US-mediated talks
