Russian oil transit halted through Druzhba pipeline to central Europe

Russia’s Transneft says oil flows halted to the Czech Republic, Slovakia and Hungary over cost problem.

The provide of Russian oil to a few European international locations by means of Ukraine has been halted because the transit cost can’t be processed because of sanctions, Russian agency Transneft has stated.

Russian state pipeline operator Transneft stated shipments had been halted by means of the southern department of the Druzhba oil pipeline, which flows by means of Ukraine to the Czech Republic, Slovakia and Hungary.

“On August 4, the delivery of Russian oil via the territory of Ukraine was halted,” the oil pipeline operator stated in an announcement on Tuesday.

The firm stated the Ukrainian aspect stopped the oil transport “due to not receiving funds for these services”.

However, deliveries to Poland and Germany through Belarus had been persevering with “as usual”, Transneft added.

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International benchmark Brent crude jumped by $2 per barrel to commerce near $98 because the information added to power provide issues, however turned adverse later within the day.

Europe is closely reliant on Russian crude, diesel, pure fuel and coal. Energy costs have rallied this 12 months on brief provide as Europe scrambles to interchange Russian power with various sources.

A spokesman for Slovak refinery Slovnaft confirmed that the transportation of oil by means of the Druzhba pipeline had been suspended for a number of days.

But he stated that the corporate’s Bratislava refinery was working and supplying the market.

“According to our information, there were technical problems at the bank level in connection with the payment of transit fees from the Russian side,” Anton Molnar stated in an announcement.

‘Dealing with the situation’

Linda Vaskovicova, head of the Slovak oil transporter Transpetrol CEO’s workplace, instructed the native TASR newswire: “We can confirm that the transportation of oil through the Druzhba pipeline through the territory of the Slovak Republic is currently suspended.”

She stated that the authorities had been “dealing with the situation”.

Molnar additionally stated that Slovnaft had initiated talks with Ukraine and Russia about the opportunity of Hungarian refinery MOL and Slovnaft paying the transit charges, which might allow the resumption of oil provides.

Hungary is likely one of the international locations most reliant on Russian oil, and its authorities has been lobbying exhausting to get exemption from wider European Union sanctions on Moscow.

Hungary can import oil through the Adria pipeline that connects the Omisalj oil terminal in Croatia to its Duna refinery in Hungary, however the capability of the route is proscribed and shipments are rather more costly than through Druzhba.

Slovakia’s choices for various oil imports are much more restricted, because it has to import oil through Hungary.

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Under the brand new sanctions, European banks must obtain approval from a related authorities authority as an alternative of deciding by themselves whether or not to permit a transaction, Transneft stated.

It stated European regulators had but to determine on algorithms for all of the banks, which complicates the dealings.

Transneft is contemplating various cost programs, however had despatched a request for the transaction to be allowed, the pipeline monopoly stated.

Since Russian President Vladimir Putin despatched troops to Ukraine, Washington and Brussels have pummelled Moscow with unprecedented sanctions, chopping Russia off from worldwide monetary establishments.

The EU has appeared to cut back its dependence on Russian power assets and has agreed to ban greater than two-thirds of Russian oil imports.

The United States banned Russian oil and fuel days after the beginning of Russia’s army marketing campaign on February 24.

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