Since August 4, Ukrainian company Ukrtransnafta has stopped pumping Russian oil through the southern branch of the Druzhba pipeline, Russian company Transneft said on Tuesday, August 9. The reason was problems with the payment of transit services due to sanctions against the Russian Federation, the company indicated: when making a payment dated July 22, 2022 for the transit of Russian oil through Ukraine in August this year, the funds were returned. to Transneft account on July 28, 2022.

“The situation is complicated by the fact that European regulators have not yet formed a unified position on the stock algorithm for banks in various jurisdictions and have not developed a procedure for issuing such licenses,” Transneft representatives emphasized.

Prepayment as a condition for the transit of oil from the Russian Federation through Ukraine

Hungary, Slovakia and the Czech Republic are supplied with oil from Russia along the southern arm of the Druzhba. Transit services through the territory of Ukraine are provided in accordance with the agreement between PJSC “Transneft” and JSC “Ukrtransnafta” on the basis of prepayment.

As noted in a Russian company press release, in order to resolve the transit payment issue, Transneft sent an appeal to an authorized bank for additional transfer of information to the European regulator in order to obtain permission to make arrangements under a according to Ukrtransnafta. In addition, the parties are discussing “alternative options for the passage of funds”.

In turn, a representative of the Slovak oil refinery Slovnaft confirmed on 9 August that the supply had not been carried out through the Druzhba pipeline for several days. However, the refinery in Bratislava, he said, continues to operate. Slovnaft is negotiating with Russia and Ukraine and is ready to assume the transit costs together with the Hungarian refinery MOL, he added.

Meanwhile, deliveries of Russian oil via the northern branch of the Druzhba pipeline – through Belarus towards Poland and Germany – are being carried out in normal mode.

In 2021, 12 million tonnes of Russian oil were pumped through Druzhba through Ukraine, including 3.4 million tonnes to the Czech Republic, 5.2 million tonnes to Slovakia and 3.4 million tonnes to Hungary. .