Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Russian oil pipeline flows resume after Hungary's MOL settles transit bill

Commodities Aug 10, 2022 11:32AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: The Druzhba oil pipeline between Hungary and Russia is seen at the Hungarian MOL Group's Danube Refinery in Szazhalombatta, Hungary, May 18, 2022. Picture taken May 18, 2022. REUTERS/Bernadett Szabo 2/2

By Gergely Szakacs and Jan Lopatka

BUDAPEST (Reuters) - Russian oil pipeline flows resumed to Central Europe on Wednesday, ending a six-day halt, after Hungarian group MOL paid transit fees owed to Ukraine, providing a temporary solution to the latest disruption of Russian energy supplies.

MOL said oil was again flowing through the southern branch of the Druzhba, or Friendship, pipeline, that it had reached Slovakia and should reach Hungary on Thursday. Oil flows, however, are not expected to resume to the Czech Republic.

On Tuesday, Russian pipeline monopoly Transneft said pipeline flows had been suspended to parts of central Europe since Aug. 4 because Western sanctions prevented the payment of transit fees from Moscow to Ukraine.

Hungary has criticised European Union sanctions against Moscow.

The Druzhba suspension drove up oil prices, which have already surged along with those for other forms of energy, as Russia's invasion of Ukraine has raised concerns of shortages, especially in Europe, which depends on Russian fuel.

International benchmark crude retreated on Wednesday, partly because of the Druzhba pipeline news and also because of a rise in U.S. crude stocks.

MOL said on Wednesday it had transferred the transit fee for the use of the Ukrainian section of the pipeline, which it said provided "a swift solution".

It said in a statement the halt had happened "due to technical issues emerging on the banking front".

MOL's Slovak subsidiary Slovnaft also made a payment to allow the resumption of flows to Slovakia, Slovnaft said.

TEMPORARY FIX

Slovak Economy Minister Richard Sulik told a news conference the payment by Slovnaft was a solution for the month of August after a Western bank had refused to process the transit fee payment made by Russia to Ukraine.

"I would not see any additional political context behind this because there isn't any. Simply, there was a technical failure or incorrect assessment. Such glitches happen," he said.

The Slovak share of the transit fees was around 9-10 million euros ($9.3-$10.4 million), he said. Hungary's MOL did not disclose the size of the Hungarian share.

The suspension of pipeline flows also hit the Czech Republic.

Czech refiner Unipetrol said that it had sufficient oil for its operations, but did not mention any resumption of Druzhba flows and declined further comment on renewing supplies by the pipeline, one of two sources of oil for its refineries.

Slovak pipeline operator Transpetrol said flows have already reached Slovakia but pumping further west to the Czech Republic was not planned.

Representatives of the Czech Industry Ministry and the national pipeline company were not immediately available for comment.

Hungary's forint, central Europe's worst-performing currency, firmed to 393.5 at 1439 GMT versus the euro from over one-week lows at 401.35 per euro, while MOL shares rose 4.34%.

Russian gas flows to Europe have also been disrupted following Russia's invasion of Ukraine begun on Feb. 24.

Since last month, gas flows through Nord Stream 1, which usually transports a third of Russia's gas exports to Europe, has been running at 20% capacity as a result, Moscow has said, of faulty or delayed equipment.

($1 = 0.9651 euros)

Russian oil pipeline flows resume after Hungary's MOL settles transit bill
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email