Are you sure?

Mol of Hungary says Russian crude oil shipments drop

Mol Rt., Hungary's biggest refiner, said oil supplies from Russia dropped by half, forcing it to tap reserves and find alternate supplies.

Oil flows were cut yesterday after shipments through Belarus stopped as part of a dispute over pricing, affecting countries including Germany and Poland. Ukraine, Hungary's neighbor, has made up for some of the missing shipments from its own reserves, Mol said in a statement. „In case the crude shipments do not restart from Belarus, the Ukraine transit reserves are expected to dry up by this late afternoon and the shipments to Hungary will accordingly stop by late evening today,” Mol said in its statement on yesterday. Shipments through the „Druzhba” or „Friendship” pipeline stopped between 4 a.m. and 10 a.m. yesterday, Economy Minister János Kóka said at a press briefing this evening. Hungary received half its normal oil supply today, Kóka said. The country was also ready to open reserves and could start shipments to the pipeline that connects Hungary with the Adriatic Sea through Croatia, he said.

The government will open reserves if there's a stoppage in shipments of more than 24 hours, Kóka said. Tankers can start feeding the Adriatic pipeline within 10 days, and crude reaching Hungary within a „couple of weeks,” he said.
„There can't be any effect” from the stoppage, Kóka said. „We can continuously replace the missing volumes.” Hungary receives 22,000 tons of crude oil a day, with Mol needing 15,000 tons to run its refineries and the rest going into reserves and resale, Lajos Alacs, Mol's head of strategy and business development, said after the press conference. The country has 500,000 tons of crude and 600,000 tons of refined products in reserve, Kóka said. The pipeline through the Adriatic has the capacity to ship up to 28,000 tons a day, fed through tankers. Mol Chairman Zsolt Hernádi said he didn't expect the price of crude or of refined products to increase because of the shortage. The company, which buys most of its oil from OAO Lukoil, may seek compensation for any contracted amount of crude not received. „We will ask our partners to explain how they wish to settle this,” he said at the press conference. Mol is in contact with oil traders and distributors operating under license from Lukoil, who are capable of replacing the pipeline capacities with tankers, he added. The shares fell 1.3% to 20,005 forint in Budapest, declining for a fifth session. The stock has lost 12% of its value in the past month. Hungary also wants to spur central and east European countries to work together to prevent further shortages, Kóka said. The country's government has contacted all nations involved, as well as the European Commission, he added. (Bloomberg)