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Russia has ordered closure of 2 of CPC's 3 Black Sea

berths

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Court hearings may take place in next few days

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Kazakhstan oil production may suffer

MOSCOW, April 3 (Reuters) - The Western-backed Caspian

Pipeline Consortium is preparing to challenge in a Russian court

a regulatory order that has crippled its exporting capabilities

and threatened to cut oil flows to global markets, three

industry sources told Reuters.

Earlier this month, Russia's transport regulator ordered the

CPC consortium, whose shareholders include Chevron ( CVX ) and

Exxon Mobil ( XOM ), to suspend operations at two of the three

moorings at its Black Sea exporting terminal following snap

inspections related to a massive oil product spill in December.

Under Russian administrative law, a court will examine the

regulator's decision. The CPC plans to challenge the decision at

the hearings, which are expected in the coming days, the sources

said, speaking on condition of anonymity.

The CPC declined to comment. The regulator, Rostransnadzor,

did not reply to a request for comment.

The CPC pipeline is a key oil export route for Kazakhstan,

which - due mainly to rising production from the giant

Chevron ( CVX )-led Tengiz oilfield - has been breaching export quotas

within the OPEC+ producer group, which includes OPEC and Russia.

Other OPEC+ members including Saudi Arabia have been also

pressing Kazakhstan to cut production to meet its quotas.

On Thursday, OPEC+

decided

to raise output ahead of schedule, signalling the group was

confident non-compliant members would reduce output in the

coming weeks.

According to traders' estimates, the CPC pipeline, which

ships about 1% of world oil supply, could lose about 50% of its

capacity if it can only rely on one berth.

Oil exports via the CPC pipeline were set at 1.7 million

barrels per day, or approximately 6.5 million metric tons, for

April, meaning that supplies of more than 800,000 barrels per

day could potentially be lost.

Traders also said that oil production in Kazakhstan, which

exports around 80% of its total oil via the route, would decline

if the restrictions remain in place for more than a week.

The CPC said this week that restrictions at the terminal

would remain until the irregularities detected by the watchdog,

which have not been made public, are dealt with.

In 2022, a court in the Russian city of Novorossiisk ordered

the CPC to halt the terminal operations for 30 days over its

paperwork on oil spills.

Chevron's ( CVX ) Kazakhstan oil venture, Tengizchevroil, said in

emailed comments it remained focused on safe and reliable

operations and referred further questions to the CPC.

Russia, the world's second-largest oil exporter, also on

Wednesday imposed restrictions on another major oil export

route, suspending a mooring at the Black Sea port of

Novorossiisk only a day after the CPC restrictions came into

effect.

The restrictions were imposed as U.S. President Donald Trump

said he was unhappy with Russia over the rate of progress in

peace talks with Ukraine, and threatened to impose secondary

tariffs on buyers of Russian oil.