US formally warned Kyiv over attacks on Russia that damage American oil majors’ interests, says ambassador

The US issued a formal warning, or demarche, to Kyiv over damage suffered by American commercial interests caused by Ukrainian attacks on Russian infrastructure used by Kazakhstan for most of its crude oil exports, according to Ukraine’s ambassador to Washington, Olha Stefanishyna.

“We have heard from the [US] Department of State that we should refrain from... attacking American interests,” Reuters on February 24 quoted the envoy as saying.

Stefanishyna added: “This reach-out was not related to encouraging Ukraine from refraining to attack Russian military and energy infrastructure. It was related to the very fact that American economic interest was affected there [with these specific attacks impacting Kazakh oil].”

The demarche might explain why recent weeks have seen no Ukrainian attacks of the type that the US has expressed concerns about.

A particularly damaging attack on the infrastructure in question occurred in late November when armed drones targeted the Russian oil export port of Novorossiysk on the Black Sea coast. Damage caused put a single-point mooring – an SPM is used for loading oil onto tankers – out of action.

In the wake of that military action, bne IntelliNews reported the perspective of a Carnegie analyst, Sergey Vakulenko, who said that Ukraine risked alienating allies with attacks on oil infrastructure in Russia that is vital to Kazakhstan’s oil exports and economy and is used by Western oil majors.

If Novorossiysk was to become a target of sustained attacks and consequently unusable as an oil export location, it could cost Kazakhstan and the majors tens of billions of dollars a year. Notably, while Kazakhstan exports around 80% of its shipped crude via Novorossiysk, with the shipments representing around 40% of its entire export trade, Russian oil, produced in the North Caucasus, accounted for just 15% of the daily throughput that passed through the Caspian Pipeline Consortium (CPC) pipeline to Novorossiysk, according to Vakulenko.

US companies have stakes in the CPC, while they also partially own major oilfields in Kazakhstan that produce crude that is piped to and exported from the Russian port. Much of what is shipped goes to European refineries.

Kazakh oil exported via the CPC and Novorossiysk is pumped from the Central Asian state’s largest oilfields: Kashagan as well as Tengiz and Karachaganak.

Wrote Vakulenko: “These fields are complex, expensive to develop, and operated by consortiums including the world’s biggest energy companies (ExxonMobil [NYSE: XOM], Chevron [NYSE: CVX], Eni [BIT: ENI], TotalEnergies [EPA: TTE], Shell [LON: SHEL], and others).”

Speaking on the fourth anniversary of Russia’s full-scale invasion of Ukraine on February 24, 2022, Stefanishyna, as reported by Reuters, also said the episode underlined Ukraine’s failure over recent decades to cultivate sufficiently deep economic ties with the US following the independence it gained after the 1991 collapse of the Soviet Union. She said she intended to address this issue.

Her mandate in Washington centres not only on supporting efforts towards a negotiated peace to end the Russo-Ukrainian War, but also on embedding durable US commercial interests in Ukraine. Such embedding represented one of the strongest possible security guarantees for her country, the news agency report reported the ambassador as saying.

Ukraine has also attacked oil tankers commissioned to transport Kazakh oil on the Black Sea export route as well as the CPC pipeline, damaging pumping stations and other parts of the infrastructure.