Igor Gyomin, the spokesman of the Russian gas transportation company Transneft, told the Russian news agency RIA Novosti:
Indeed, Ukrtransznafta completely stopped pumping oil to Hungary, the Czech Republic, and Slovakia via the southern branch of Friendship at 6:10 a.m. on August 4.
According to the spokesperson, the reason for this was that the Russian side could not pay for the transit fee due to European sanctions. It is based on a one hundred percent advance payment. The transfer of July 22 was returned to Transnefty’s account. According to Reuters information, this happened on July 28, and 6 days after that the Ukrainian transit was shut down, which is why Transneft also stopped oil and further pumping into the pipeline. More about this in the original article:
According to the statement of the Russian company European banks are no longer entitled to decide independently whether they can carry out a specific transaction, to confirm that it is not prohibited, the bank must obtain permission from the national authorized state body. The situation is complicated by the fact that European regulators have not yet developed a unified position on the action algorithm for banks in different jurisdictions, and have not developed the procedure for issuing the above licenses.
Transneft informed the Russian Ministry of Energy, Ukrtransnafta, and the Russian suppliers exporting oil to the three countries about the situation. According to the announcement
in order to resolve the issue, Transznefty asked the authorized bank to notify the European regulatory authority in order to obtain permission for settlements under the contract with Ukrtransznafta. Alternative options for transferring funds are also being investigated.
The latter sentence is important because Mol indicated to Portfolio and Slofnaft to the Slovak media that they are also examining the issue of taking over the transit fees (According to the announcement, Mol “initiated negotiations on the assumption of the fee obligation”.)
It is also important that the transit of crude oil to Poland and Germany is uninterrupted on the northern branch of the Friendship pipeline, which runs from Belarus to the two countries. The southern branch leads from Belarus through Ukraine to Hungary, Slovakia and the Czech Republic.
Speaking to RT, Stanyslav Mitrahovich, professor of the Russian government’s University of Finance and expert of the National Energy Security Fund, said: the shutdown means that the amount of oil delivered to the market of these countries will decrease. He reminded her that according to the regulations, the oil transported by pipeline should not be affected by the sanction, because it is difficult to switch refineries built on the pipeline. The expert did not rule out the possibility of a compromise on the issue, because the energy market situation in Europe is tense anyway.
Cover image source: Portfolio