(Bloomberg) -- Oil flows through Russia’s Baltic Sea port of Ust-Luga appeared to pause, backing up Kyiv’s claims of a successful drone strike on a pumping station.
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It would present a significant new supply threat for the global oil market if it were to be confirmed that Ukrainian drone strikes have damaged the pipeline system feeding Ust-Luga, halting oil shipments from the port for a prolonged period.
A person with knowledge of the deliveries said that Ust-Luga flows dropped to zero on Jan. 29. Shipping data seen by Bloomberg indicate a tanker left early Wednesday, although there is a gap in vessel signals after that. Neither provided a reason for the apparent decline, and there can be periods when ships don’t load anyway.
A Ukrainian security official said on Wednesday that the nation’s drones had struck Russia’s Andreapol pumping station on the Baltic Pipeline System-2, which feeds Ust-Luga, causing the link to halt. The claim couldn’t be verified at the time and the press service of Russia’s oil-pipeline operator declined to comment by phone on Thursday.
The port handled about 650,000 barrels a day of crude last year, or about 20% of Russia’s total seaborne flows, data compiled by Bloomberg show. To put the exports into context, the International Energy Agency anticipates a global supply surplus of about 725,000 barrels a day in 2025.
It’s still possible that there are barrels in storage available to load, cushioning the impact of any curtailment.
Flows from the port had slumped without explanation in recent weeks. The timing of that decline coincided with when an unspecified — and temporary — incident happened at the Unecha pump station to the east of Belarus that was reported by the Belta news agency at the time.
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