The drop in July supplies came shortly after the Czech Republic signed an agreement to host a radar base as part of a US missile shield and sparked speculation that the supply reduction was retaliation from Russia. Deliveries to the former Soviet-bloc country had been cut by around half of the usual 500,000 metric tons last month due to what Russian supplier Tatneft said was lack of crude.

Russian officials said the cuts were not political, and Prime Minister Vladimir Putin ordered supplies to central European country be returned to full levels last week. “It looks like the supplies (today) are in the volumes that have been promised,” said Dana Dvorakova, spokeswoman for Czech refiner Unipetrol on Friday. “The deliveries have increased.” She said official confirmation on August supply would come next week.

A Unipetrol source said deliveries at “promised levels” meant that Russia was supplying all that it had agreed under contract, but that the amount was actually 15-20% lower than the firm had requested. Vaclav Bartuska, the Czech Republic’s ambassador-at-large for energy security, said other supply recipients had also received less than requested for August.

A Czech Industry Ministry spokesman said final delivery statistics for July would also be released next week. “We perceive (the return of supplies) as a positive step,” said ministry spokesman Tomas Bartovsky. Unipetrol has been tapping into state oil reserves and importing more oil than usual through the IKL pipeline from Germany to counter the drop in deliveries. Bartuska said these sources will still be used in August.

Analysts have said oil coming from the IKL is more expensive to process. “These deliveries are costlier, and have negatively impacted the refining segment’s performance in the first month of this quarter,” analysts at Atlantik FT brokerage wrote in a note.

Unipetrol holds a 51% stake in the country’s largest fuel refinery Ceska Rafinerska along with Italy’s Eni, a 32% stakeholder, and Royal Dutch Shell, with a 16%. Shares in the company, 63% owned by Poland’s PKN Orlen, closed 1.4% up at 217 Czech koruna. (Reuters)