A European Bank has Agreed to Handle Transit Payments of Russian Oil to Central Europe

Energy | August 12, 2022, Friday // 13:55|  views


A European bank has agreed to pay for the transit of Russian oil through Ukraine, Slovakia's Slovnaft refinery and another source familiar with the matter reported. In this way, the reason for the suspension of oil supplies to Central Europe last week is removed, writes Reuters.

If the payment is confirmed by all parties, it will be a step towards restoring oil flows to the Czech Republic after the week-long outage and will set the stage for future transit payments to the region.

On Tuesday, the Russian monopoly “Transneft” announced that since August 4, supplies through the “Druzhba” pipeline to the Czech Republic, Hungary and Slovakia have been suspended, as Western sanctions have prevented the payment of transit fees from Moscow to Ukraine.

Flows to Hungary and Slovakia resumed on Wednesday after Hungarian refiner MOL and its Slovak unit Slovnaft found a workaround by paying the fee themselves to Ukrainian transit company Ukrtransnafta, but supplies to the Czech Republic were not resumed.

"According to our information, the bank has reviewed the initially blocked payment between the transit companies for the transit fee and ultimately accepted it," Slovnaft spokesman Anton Molnar said.

"This confirms that the framework created in this way is functional and can be a long-term solution," he said.

Another source familiar with the matter said the payment had been unblocked by Netherlands-based bank ING and that flows to the Czech Republic should resume by Saturday.

ING declined to comment on the matter, Reuters specified.

Central European countries are partly dependent on Russian oil and largely on Russian gas and have secured exemptions from the European Union's upcoming ban on Russian oil imports until they adapt their transport routes and refineries for other oil.

Czech oil refinery ORLEN Unipetrol, a division of Poland's PKN Orlen, declined to comment.

Czech oil transit company MERO, which operates the Czech section of the Druzhba pipeline, said it had no information on the status of the payment.

On Thursday, MERO chairman Jaroslav Pantucek said he expected flows to the Czech Republic to resume on Friday or Saturday once the payment issue was resolved, although he suggested PKN could make a replacement payment similar to MOL, which PKN refused to confirm.

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Tags: bank, Russian, oil, europe


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