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Oil exports via southern Druzhba seen little changed in Nov if supplies resume shortly -sources

Thursday, 17 November 2022 | 17:00

The plan for oil shipments through the southern branch of the Druzhba pipeline, which connects Russian fields to refineries in Hungary, Slovakia and the Czech Republic, will be little changed in November if pumping is restored within days, three industry sources familiar with the deliveries told Reuters on Wednesday.

On Tuesday, Ukraine Transneft TRNF_p.MM that oil pumping would be suspended through Druzhba in the direction of Hungary due to a voltage drop.

According to the sources, if shipments are suspended for a short period of less than a week, the pace of pumping can be caught up and exporters and buyers will not have to revise their plans for the current month.

Two traders said that Russian companies that supply oil along the routes have not yet applied for the redirection of flows to other routes.

In August, oil supplies along the southern branch of Druzhba were suspended for a week due to problems with payments by Russia’s Transneft to its Ukrainian counterpart for transit. The suspension didn’t affect the monthly plan then.

Transneft reported that Ukraine does not plan to resume oil pumping through the Druzhba pipeline on Wednesday, while Hungarian Foreign Minister Peter Szijjarto said the pipeline can likely be restarted within a short time as it had not been damaged.

Urals oil supplies via southern Druzhba amount to about 250,000 barrels per day (bpd), the lion’s share is shipped to the Hungarian refiner Mol and its subsidiary in Slovakia – Slovnaft. Less than a quarter of the volume goes to the Czech Republic to Ceska Rafinerska, controlled by Poland’s PKN Orlen.

The main suppliers along the route are the Russian companies Lukoil and Rosneft.

Hungary, Slovakia and the Czech Republic were allowed to continue importing Russian Urals oil after the EU embargo from Dec. 5 precisely because of their difficulties with logistics that make these states highly dependent on supplies via Druzhba.
Source: Reuters (Reporting by Reuters; Editing by Bernadette Baum)

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