Ukraine halts transit of tainted Russian oil

Analysis

maradon 333/Shutterstock.com

Ukraineʼs oil pipeline operator JSC Ukrtransnafta suspended transit shipment of Russian crude oil through the Mozyr-Brody main oil pipeline (Druzhba main pipeline) at 9.43 p.m. local time on Thursday, April 25, Hungarian news agency MTI reported, citing Ukrainian news portal unian.info.

Illustration: maradon 333/Shutterstock.com

"By taking this decision, the company was guided in particular by an agreement on crude oil transportation services via Ukrainian territory," the company said in a statement. "Under the agreement, Ukrtransnafta has the right to stop the intake of Russian crude oil if the raw materials do not comply with quality indicators. All losses are borne by the side that did not comply with its obligations."

The operator also cited two other reasons: namely, the pumping station in Budkovce, Slovakia, refused to accept the poor-quality crude oil from Russia, while Hungaryʼs Fényeslitke had no free crude oil storage tanks.

As the Budapest Business Journal reported yesterday, the Russian crude oil coming through the Druzhba pipeline was found to contain high levels of organic chloride, a material used to boost oil output which must be separated before shipment as it can destroy refining equipment.

Hungarian oil and gas company MOL told MTI on Thursday that it was aware of concerns about the quality of oil flowing through the northern section of the Druzhba pipeline.

MOL and Slovnaft, MOLʼs Slovakian subsidiary, are conducting regular testing of oil in the southern sections of the pipeline, which includes areas in Slovakia and Hungary, at various access points. Based on current information, the quality of crude oil meets set standards, the company said.

The two companies are in talks with regulators and companies in charge of crude oil supply to the region, MOL added.

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