The Dirty Fuels Cartel cares nothing for silly things like governments, or national borders, or the lives of ordinary people who they believe can only do small things for them.
And in case you needed reminding, no - there is no honor among thieves.
- Russian and Iranian crude is being blended into Kazakhstan’s CPC oil exports, allowing sanctioned barrels to reach Europe under Kazakh documentation.
- Discounted Iranian oil is financing Russian military supplies to Tehran, including missiles and surveillance technology, through an alleged oil-for-arms arrangement.
- Russia and Iran are reportedly preparing to exploit the Baku-Tbilisi-Ceyhan pipeline from 2027, potentially routing 600,000–750,000 bpd through the corridor to circumvent Western sanctions.
In terms of Russian crude oil exports continuing to be transported specifically via pipeline to Europe -- which the EU has committed to completely phase out by 31 December 2027 -- the Caspian Pipeline Consortium (CPC) is the primary, active corridor through which the EU effectively evades its own sanctions framework, and that of the U.S., as managed by the Office of Foreign Assets Control (OFAC). While the EU has officially banned seaborne imports of Russian crude, the ‘CPC Blend’ crude oil stream -- which terminates at and ships from the Russian port of Novorossiysk -- was granted a specific legal exemption by Brussels on 3 June 2022. This carve-out was justified on the grounds that the underlying volumes originate in Kazakhstan. Since that date, annual throughput of this supposedly Kazakh-only crude oil has surged from 52 million metric tonnes -- around 1.04 million barrels per day (bpd) -- to a record-breaking 72 million metric tonnes: a massive 38.5% increase. However, over that period, Kazakhstan’s actual domestic oil production has grown less than 2%, with its true crude oil output this year having fallen significantly due to operational disruptions and strict OPEC+ quota limits. According to a very senior EU source in its energy security complex exclusively spoken to by OilPrice.com last week, the huge discrepancy between the crude oil volume rise in the CPC over the period and Kazakhstan’s own oil output volume over the period represents the active ‘ghost volume’ where a heavily discounted cocktail of Russian crude -- mixed with Iranian oil -- is being quietly blended and laundered straight to European destinations completely outside the G7-monitored Russian shadow fleet.
This is not merely an energy laundering operation -- it is a direct, infrastructure-backed financing mechanism for Iran’s Islamic Revolutionary Guard Corps (IRGC) and its terrorist proxies around the world. Deeply embedded in the trade is Khatam al-Anbiya, the engineering and industrial wing of the IRGC, alongside the National Iranian Oil Company (NIOC). Because Tehran cannot easily conduct transactions via Western financial networks, for reasons fully analysed in my latest book on the new global oil market order, it is allocating massive tranches of crude directly to the IRGC and its proxies to cover expenses and to pay Moscow for advanced Russian military hardware and software. This includes specialised air-to-air missiles, ‘Verba’ man-portable air-defence systems and real-time Russian orbital surveillance and satellite data that directly aids the IRGC in tracking Western and regional military installations, among many others. According to the EU source, this Iranian crude is transferred to Russia at a staggering discount of 35% to 42%, and then seamlessly integrated into Russia’s domestic pipeline matrix via a rapidly expanding fleet of non-aligned tankers in the secure, unmonitored waters of the Caspian Sea. It is then pushed into the CPC network under forged Kazakh certificates.
As devastating as this active CPC loophole is for Western policy credibility, things are set to become much worse. With Russia (and therefore Iran) facing an imminent capacity crunch as the EU’s statutory 31 December 2027 phase-out date approaches, the EU source highlights that Moscow and Tehran are organising a clandestine operational pivot to integrate the highly strategic Baku-Tbilisi-Ceyhan (BTC) pipeline into this exact Russian-Iranian-Kazakh mix. To lay the groundwork for this upcoming shift, Moscow, Tehran, and Astana are already utilising the public corporate media to build a plausible cover story. The official press release frames this as a purely commercial diversification strategy by state energy giant KazMunayGas (KMG) to mitigate the ‘geopolitical instability’ of the Russian-controlled CPC route. Meanwhile, Kazakhstan’s energy ministry director of oil transportation and refining, Daulet Arykbayev, stated on 1 October that Kazakhstan aims to increase its crude supply through the BTC pipeline, which runs from Azerbaijan to Turkey, to 7 million metric tons per year (mtpy). To put that into context, Kazakhstan exported 1.2 million mtpy of oil via the BTC in 2025 and around 700,000 metric tons in the first half of this year, according to KazTransOil.
“That’s clearly a huge increase -- more than five-fold -- from a country whose domestic oil production is declining, and which never sent anywhere near that amount through the BTC,” said the EU source. “We believe this sudden, aggressive pivot to the BTC corridor starting in February [2027] is specifically timed to act as the primary, next-generation relief valve for the heavily discounted Russian-Iranian military-energy swap,” he told OilPrice.com. Indeed, the clandestine blueprint centred on the Northern Corridor -- the trans-Caspian land and sea route that physically links Iran and Russia through the Caspian Sea, connecting them directly into the South Caucasus transit grid -- aims to pump a staggering 600,000 to 750,000 bpd through the BTC by March-April 2027. That is a volume equivalent to nearly half of Kazakhstan’s entire OPEC+ national production quota, which is currently locked at 1.628 million bpd. “Kazakhstan’s target is highly improbable, given existing infrastructure limits, meaning the massive deficit can only be met by the illicit introduction of heavily discounted oil from the Russian-Iranian crude swap,” he concluded.
Ultimately, the upcoming February 2027 pipeline pivot exposes the official Western sanctions timeline as little more than political theatre. As the front doors to Russian and Iranian energy are legally bolted shut, the infrastructure of the South Caucasus is being systematically re-engineered to absorb the overflow. For global oil markets, the message is clear: the volume will always find a way to flow. By the time the EU officially celebrates its total detachment from Russian crude at the end of 2027, the illicit, heavily discounted flows running through Ceyhan will have already become the global market’s worst-kept and most lucrative open secret.
No comments:
Post a Comment