“Friendship” – “Friendship”, and the refinery apart – Kommersant

The European Union, within the framework of the forthcoming 11th package of sanctions, at the initiative of Warsaw, may prohibit the pumping of Russian oil through the northern branch of the Druzhba oil pipeline to Germany and Poland. Subsequently, the market believes, this ban may also apply to supplies from third countries, in particular, from Kazakhstan, which now supplies raw materials to German refineries through this pipe. Such restrictions will allow Poland to become a key supplier of oil to Germany, which will give the country an advantage in negotiations with Berlin on the sale of refining capacity, as well as weaken the position of Russian companies seeking to return their shares in the plants.

The EU has proposed officially stopping the supply of Russian oil through pipelines to Germany and Poland as part of the forthcoming 11th package of sanctions against Russia. This was reported by the agency with reference to relevant documents. Bloomberg. Now these countries, in the form of an exception granted in June last year, can receive raw materials from Russia through the northern branch of the Druzhba oil pipeline, which runs through Belarus to Europe. And it is the EU that proposes to abandon it. In 2022, the average volume of German and Polish imports through Druzhba, according to Bloomberg, was about 480 thousand barrels per day. At the same time, exceptions allowing pumping through the southern branch of the gas pipeline, which supplies Hungary, Slovakia and the Czech Republic, will remain in force.

As Transneft reminded, in fact, deliveries via Druzhba to Germany and Poland were stopped in February-March. Now, Igor Demin, adviser to the head of the company, explained, only oil from Kazakhstan is pumped to German refineries via this route. “Now there are applications for transit through Druzhba to Germany of Kazakh oil in the amount of 100,000 tons per month, but in fact less is transported. In March, deliveries amounted to 20 thousand tons, in April – 50 thousand tons. Volumes for May have not yet been confirmed,” he said.

The initiator of a complete ban on imports along the northern branch of Druzhba is Warsaw.

Kommersant’s sources on the market do not rule out that this may be a step towards a complete halt in pumping along this route, including Kazakh oil. This option is beneficial for Poland, which is interested in the transit of raw materials to German refineries through its territory. The country itself receives significant volumes of oil from Kazakhstan through a terminal in the port of Gdansk. It arrives there by sea from Ust-Luga, to which it is transported along a branch from the same northern branch of Druzhba.

The volume of pumping in this direction is up to 10 million tons per year. As Kommersant’s interlocutors explain, Poland fears that Kazakhstan may subsequently redirect oil from Ust-Luga directly to Germany. At the moment, this does not allow making a long-term contract with a number of restrictions. If Warsaw achieves a complete ban on oil supplies through Druzhba in the future, Belarus, which receives payment for transit, will suffer the most from this, Kommersant sources say. At the same time, Poland itself is losing significant money: in early May, the chairman of the board of the Polish Orlen, Daniel Obaitek, said that the ban on Russian oil costs the company about $27 million a day due to a price difference of about $30 per barrel between cheaper raw materials from Russia and alternative supplies.

At the same time, the possible introduction by the European Union of a ban on oil supplies via the Druzhba pipeline to Germany and Poland will not affect Russian companies, analysts say.

According to Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, Russia itself actually stopped pumping to Poland, despite the fact that the country had a valid contract with Tatneft for the supply of 200,000 tons of oil per month until December 2024. But in February, the Ministry of Energy unexpectedly did not confirm the transportation schedule, and Tatneft did not pay for pumping. So such a clause in the 11th package of sanctions can be considered nominal, he notes.

Also, Mr. Yushkov believes that by banning supplies to Germany through Druzhba, Poland is leading Berlin to sell oil refineries in the country that previously belonged to Rosneft. According to the expert, if the pipeline from Gdansk becomes the only source of supplies of raw materials, this will give Warsaw an advantage in negotiations on the purchase of processing capacities. In addition, Igor Yushkov believes that the official suspension of pumping through Druzhba will weaken the position of Russian companies that are seeking to restore their right to own shares in refineries in Germany. Without the prospect of supplying these plants with their own oil, their ownership becomes meaningless, as the economic effect is lost, the expert notes.

Sergei Kolobanov, Deputy Head of the Economics of the Fuel and Energy Sectors Department of the Center for Strategic Research, agrees with this opinion. “If, nevertheless, the assets of this refinery return to the management of Rosneft, the ban on pipeline oil supplies from Russia to Germany will significantly worsen the profitability of production, but you should not count on this in the current political realities,” he explained to RIA Novosti.

Olga Mordyushenko