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Russia: Clean Crude Oil To Reach Slovakia, Hungary Within Week

Oil pipeline

Russia is sending clean within-standards crude oil via the Druzhba pipeline toward Hungary and Slovakia, with first clean oil expected to arrive at the metering stations in those countries within a week, Russia’s energy ministry said on Wednesday, a month after supplies were halted due to contaminated crude.

Russia also continues negotiations with Poland in view of restarting the crude oil flow via the pipeline to the Adamova Zastava station, Russian media quoted the country’s energy ministry as saying in a statement.

The now month-long suspension of Russian oil supply via pipeline to several European countries comes as global supply outages mount with Venezuela and Iran, and with increasing supply disruption risks in Libya or in the Middle East.

Last month, Russia halted supplies via the Druzhba oil pipeline to several European countries due to a contamination issue, which the Russians say was deliberate.  

The oil was contaminated with organic chlorine, a substance used in oil production to boost output but dangerous in high amounts for refining equipment. The amounts of the chemical were found to be at levels much higher than the maximum allowable amount.

The Russian oil supply contamination has disrupted the refinery operations of some companies. Total, for example, halted last week some of the units at its 230,000-bpd Leuna refinery in Germany to conduct technical checks. On Thursday, Total declared force majeure on shipments of refined oil products from the Leuna refinery.

Total and Eni are said to have suspended payments to the Russian companies that sold them contaminated crude, in a new controversy in what trading sources described to Reuters as the “biggest Russian oil supply disruption ever.”  

Russian pipeline operator Transneft will compensate its customers for the losses they have sustained due to the contaminated oil, Russian Deputy Prime Minister Dmitry Kozak said last week, noting that refiners must first prove their damage and loss in order to claim compensation.

By Tsvetana Paraskova for Oilprice.com

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