Oil flows via Friendship Pipeline halt because of Ukraine
Russia announced that deliveries via the southern leg of the Druzhba oil pipeline have been halted because of Ukraine. There are contradicting news reports, but Russians would have to pay a transit fee on a particular section of the line, which Ukraine has refused to accept, calling it "blood money." Ukraine's obvious goal is to stop crude flows via the Druzhba pipeline. Hungary's MOL group has offered to pay the transit fee itself, but the company has yet to receive a response from Kyiv, sources say.
According to sources, the payment of transit fees did not go through between Russia’s Transneft and Ukraine’s Ukrtransnafta at the required time. Consequently, the Russian side announced that they would stop deliveries via the southern leg of the Druzhba, also known as the Friendship pipeline.
Hungarian oil and energy giant MOL has offered to pay the transit fees instead of the Russians, but has received no response from Ukraine, according to information obtained by the Hungarian Origo news portal.
Ria Novosti reports that the Russians are supposed to pay a transit fee on a Ukrainian section but have been unable to transfer the money, because of the sanctions. The Ukrainians refused to receive the money in any other way, thus drawing flows on the pipeline to a halt. We understand that Russia is appealing to Brussels to resolve the situation and secure continuous oil supplies. The bottom line is, however, that the Friendship Oil Pipeline was forced to shut down because of the Ukrainians.
Hungary’s state-owned gas and oil company MOL has issued a statement on the situation. “Oil deliveries on the Friendship pipeline have been interrupted for several days because, to our knowledge, there have been technical problems on the banking side with the Russian party’s payment of the transit fee. Although MOL has several weeks’ worth of reserves, the company is working on a solution and has also initiated talks on taking over Russia’s payment obligation,” the statement says.