Russia’s Transneft says oil flows halted to the Czech Republic, Slovakia and Hungary over cost situation.
The provision of Russian oil to 3 European international locations by Ukraine has been halted because the transit cost can’t be processed as a consequence of sanctions, Russian agency Transneft has mentioned.
Russian state pipeline operator Transneft mentioned shipments have been halted by the southern department of the Druzhba oil pipeline, which flows by Ukraine to the Czech Republic, Slovakia and Hungary.
“On August 4, the supply of Russian oil through the territory of Ukraine was halted,” the oil pipeline operator mentioned in a press release on Tuesday.
The corporate mentioned the Ukrainian aspect stopped the oil transport “as a consequence of not receiving funds for these companies”.
Nonetheless, deliveries to Poland and Germany through Belarus have been persevering with “as standard”, Transneft added.
Worldwide benchmark Brent crude jumped by $2 per barrel to commerce close to $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 gasoline and coal. Vitality costs have rallied this yr on brief provide as Europe scrambles to interchange Russian power with different sources.
A spokesman for Slovak refinery Slovnaft confirmed that the transportation of oil by the Druzhba pipeline had been suspended for a number of days.
However he mentioned that the corporate’s Bratislava refinery was working and supplying the market.
“Based on our data, there have been technical issues on the financial institution degree in reference to the cost of transit charges from the Russian aspect,” Anton Molnar mentioned in a press release.
‘Coping with the state of affairs’
Linda Vaskovicova, head of the Slovak oil transporter Transpetrol CEO’s workplace, advised the native TASR newswire: “We are able to verify that the transportation of oil by the Druzhba pipeline by the territory of the Slovak Republic is presently suspended.”
She mentioned that the authorities have been “coping with the state of affairs”.
Molnar additionally mentioned 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 among the international locations most reliant on Russian oil, and its authorities has been lobbying laborious 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 restricted and shipments are rather more costly than through Druzhba.
Slovakia’s choices for different oil imports are much more restricted, because it has to import oil through Hungary.
Underneath the brand new sanctions, European banks should obtain approval from a related authorities authority as an alternative of deciding by themselves whether or not to permit a transaction, Transneft mentioned.
It mentioned European regulators had but to resolve on algorithms for all of the banks, which complicates the dealings.
Transneft is contemplating different cost methods, however had despatched a request for the transaction to be allowed, the pipeline monopoly mentioned.
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 seemed to cut back its dependence on Russian power assets and has agreed to ban greater than two-thirds of Russian oil imports.
America banned Russian oil and gasoline days after the beginning of Russia’s army marketing campaign on February 24.