Out Of Friendship. The loss of Ukraine on “dirty” oil

По Дружбе. Потери Украины на "грязной" нефти

Ukraine has renewed oil transit

On the background of sanctions and restrictions of deliveries of Belarusian oil products prices on the Ukrainian filling stations increased. How to change the situation with the resumption of transit?

Ukraine has renewed oil transit to the EU through the main Druzhba pipeline, which was suspended in April because of the poor quality of Russian oil. During this time, Ukrtransnafta lost about one million of revenue. Belarus bills Russia for “hundreds of millions of dollars.”

On the background of the scandal with the “dirty” oil in Ukraine at the gas station price of fuel has increased. However, experts say that the prices more affected by the situation on the world oil market, but I advise you to think about the creation of reserves of oil and oil products. Корреспондент.net tells details.

 

Russia has found pollutants in the oil

19 April the Belarusian petrochemical company Belneftekhim said that he had received from Russia for the Friendship of poor quality oil with a high content of organic chlorides and 23 April stopped pumping.

Also entered Ukraine and Poland whose territory the pipeline further into the EU. “Dirty” oil Opel to get into these countries.

Substandard total volume of Russian oil with a high content of chlororganics, which have accumulated in the pipelines of Russia, Belarus, Ukraine and Poland, was estimated at five million tons.

Adelec pipeline Transneft and the energy Ministry acknowledged the problem and promised to rectify the situation soon.

Later in Transneft said that the stuffing organochlorine compounds occurred as a result of the fraudulent scheme by private enterprise in the Samara region.

Six people are suspected of embezzlement as part of an organised criminal community for the sum about one million rubles. To hide the crime, they let the contaminated oil.

In the case arrested four people they are charged with an article about unauthorized connection to pipelines or bringing them into disrepair. Among them are top managers several. Other defendants in Romana Ruzicka and Roman Trusheva – declared in the international search.

Russian President Vladimir Putin said that the situation with poor quality oil supplied by Druzhba pipeline, have caused “very serious economic, financial and image damage.”

4 may Russian oil again went to Belarus. Ukraine has renewed oil transit on 11 may. According to 13 the number of Transit condition of oil through the Belarusian section of the Druzhba pipeline to Ukraine downloaded by about 60 percent, pumping towards Poland not resumed.

More specifically, Ukrtransnafta started pumping “clean” of Russian oil through its territory to the European Union. For the transit of the first batch will take a few days, so certified product will reach the customer, in this case Hungarian oil and gas company MOL, no earlier than may 17.

However, the southern branch of the Druzhba pipeline starting in Belarus and running via Ukraine to Hungary, Slovakia and the Czech Republic, is a secondary direction. The main volumes in this transport system has always followed the Northern branch in a westerly direction from Belarus to Poland and Germany.

По Дружбе. Потери Украины на "грязной" нефти

Belarus wants hundreds of millions of dollars

Contamination of oil has occurred amid a new dispute between Moscow and Minsk about the cost of transit. Due to the deterioration of the environmental situation and the need to repair Belarus wants to increase the tariff by 23 percent. Russia calls the position of Minsk is unfounded.

Minsk said that because of the poor quality of Russian oil broke down equipment on one of the country’s largest oil refineries.

The rhetoric of the Belarusian authorities in the energy sector tightened due to the ongoing Russia’s tax maneuver – zeroing of export duties and simultaneous increase of the tax on extraction of mineral resources.

At the beginning of the year, President of Belarus Alexander Lukashenko demanded from Moscow compensation for the costs of the implementation of the tax maneuver, after which the price of Russian oil for Belarus will be equal with the world. Losses in total amount to 383 million dollars, while the price of oil in 70 dollars for barrel.

The cause of the accident on Friendship Lukashenko called “laxity and looseness on the territory of Russia”. Thus, as suggested by the President of Belarus, Putin “understands that the damage should be compensated.”

He estimated the damage at “hundreds of millions of dollars.” The exact amount will be determined after inspection at the refinery, he added. According to Lukashenko, every year on cleaning the plants gets 1-1,5 months.

“This is a huge damage caused to the pipeline to the equipment on the pipeline pumps in the stations and things, and the refinery. Two refineries, Mozyr especially, more than Navapolatsk, was contaminated. And that’s a huge damage that was caused to the country,” he said.

Such a high damage Lukashenko proved that contaminated oil caused a very severe corrosion: “a week even a pipe, through which pumped oil, 4-5 mm, as experts say, eats”.

Russian Vedomosti estimated the damage of Belarus in 271-435 million dollars.

 

The consequences for Ukraine

On the eve of the oil scandal, on 18 April, Russia decided to impose new sanctions against Ukraine. The main measure was the almost complete ban on the export of Russian oil and oil products, and coal from 1 may. They can be imported from Russia to Ukraine only for individual permits.

Then began the unrest that due to Russian sanctions will spike the cost of gasoline and other petroleum products.

But experts are assured that if wnanie on prices, it will be insignificant, due to the “Botanical substitution”, including from Belarus. In detail, in the material of the Ukraine without oil of Russia: impact of sanctions.

Crude oil Ukraine gets mostly from Azerbaijan, but two refineries only produce two million tons of oil products per year, whereas we need more than ten. Belarus had become the largest source of fuel for Ukraine.

Only in Ukraine to 2018 imported oil products for $ 5.5 billion. Of them, according to Russian customs statistics, 2.9 billion went to Russia (primarily diesel fuel).

In January-March 2019, the share of imports from Russia of oil products on the Ukrainian market accounted for more than 41 percent. More Russian oil products to Ukraine Belarus imports only. But oil products for Ukraine in Minsk produces on the basis of Russian oil.

Prime Minister Vladimir Groisman promised that the Ukrainian government will find a way to minimize the damage from that adopted by the Russian government ban.

“Our market is quite diversified, but it is clear that we are still dependent, for example, from Belarus. But we will find a solution to the situation was with minimal losses. This is not a simple task, but we will find a solution,” – said the Prime Minister.

Ukrtransnafta has estimated the losses from the stop of the transit of one million dollars. To compensate for these losses, Kiev expects due to the increase in shipment volumes in subsequent reporting periods until the end of the year.

 

Fuel prices at filling stations

As for consumers, a leading market analyst for the PRICE Futures Group Phil Flynn warned that the overlap of supply may raise prices of gasoline and diesel fuel, because the refinery is not easy to find a replacement for raw materials.

Slovak energy expert Karel Hirman advises Kiev to draw conclusions and reflect on the creation of reserves of oil and oil products, as the current incident could happen again at any time because of a “bad system of control over the oil in Transneft”.

Director of energy programs of Razumkov Center Volodymyr Omelchenko said that neither Russia nor Belarus are not interested in the loss of the Ukrainian market. The shortage of fuel is not worth waiting, it will manifest itself in higher prices, he said.

Omelchenko believes that petroleum products can arrive from Bulgaria, Lithuania, and Poland, which can complicate logistics, which will also affect prices.

In this regard, the price of petroleum products in Ukraine increased by more than UAH per liter. Making predictions in the cost of fuel at gas stations in may, experts remind that it is influenced by three factors: the cost of petroleum products at the border, exchange rate and market situation.

“The hryvnia is stable, and for this reason the prices just will not grow. A large network, if there are no negative trends to raise prices will not be, and other minor filling will catch up to their level”, – quotes Today the Director of the Institute of energy research Dmitry marunych.

Oil refining in Belarus has already begun, so further price increase on this basis, according to experts, will not.

In addition, if the US pressure on OPEC in connection with the sanctions against Iran will be successful, oil prices may drop to $ 70.

“In my estimation, at this price and the currency exchange rate of 26.5 per dollar of gasoline A-95 should cost 28, 5 hryvnia per liter. 1.5 UAH can be cheaper and diesel fuel,” said analyst Dmitry Khoroshun.

However, the expert warns that the markets may still be in limbo due to the Russian sanctions.

“If Russia clearly would not understand in may that the volume from June 1 will not be reduced, it is very possible “bust”: importers and domestic retail will be in advance to prepare for the replacement of Russian volumes, increasing prices even on the hryvnia,” – says Khoroshun.

 

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