Russia will reduce its oil production by about 10% in the coming days, as exports suffer: sources

LONDON (Reuters) – Russia cuts its oil production by 10% for several days, due to disruptions due to crude oil contamination by a major pipeline to Europe and a key port for exports, announced Friday sources from the industry.

Russian oil producers have received state monopoly on pipelines, Transneft, a request for reduction of oil production of 900,000 tons, or about 6.6 million barrels, until May 7 , told Reuters two sources of the industry.

According to Reuters calculations, this represents more than one million barrels per day (bpd) over the next five days, or about 10% of the world's second largest crude exporter.

Transneft declined to comment.

"It just shows that this disturbance is extremely serious. Russia has had its main export pipeline and port closed or not functioning properly in the last 10 days. Production cuts are therefore inevitable, "said a Russian oil buyer with a major oil company.

For a map of the Russian pipeline, click on: tmsnrt.rs/2DytnnM

Last week, Russia interrupted oil flows in the Druzhba pipeline to eastern Europe and Germany due to contamination of crude oil, helping to drive up world oil prices at their highest level in six months and European refiners seeking supplies. Oil sent to the Baltic port of Ust-Luga has also been contaminated.

For a factbox on what happened, see

Transneft has promised to resume normal oil flows to Ust-Luga by May 7, but has indicated that resuming normal operations along Druzhba could take longer.

Belarus said it could take months to fix the pipeline problem, while refiners from all over Europe have reduced their lead times and asked governments to allow them to use stockpiles. strategic oil.

At least 5 million tonnes of oil, or about 36.7 million barrels, have been contaminated with organic chloride, a compound used to stimulate oil extraction but which must be removed before the oil is sent to customers because it can damage the refining equipment.

Transneft stated that the contamination had occurred in the Volga region of Samara and had accused unnamed "fraudsters". President Vladimir Putin said that Transneft had no proper mechanism to prevent contamination.

Major Russian oil buyers have asked Transneft to provide answers on how and when to solve problems. Industry sources have however indicated that communications with Western buyers and even local producers have been limited to date.

The Russian oil company Surgutneftegaz, from Ust-Luga, is struggling to sell goods quickly for the month of May, even after several tenders and despite discounts.

"Nobody understands what type of rebate would cover your costs and therefore nobody wants to touch the barrels," said a second Russian oil buyer with a trading company.

In addition to Moscow's problems, the usual spring cuts in refining operations at domestic factories have left more crude for export when Russia has fewer roads to ship crude abroad.

"Transneft needs to restore clean Ust-Luga flows by May 7, otherwise the problems will really worsen," said a third major Russian oil buyer with an important one.

About 15 tankers containing contaminated oil have already sailed from Ust-Luga to the west, which means that most refiners have already exhausted their capacity to store unwanted hydrocarbons in order to mix them up. to cleaner crude oil to dilute contaminated oil.

"Once everyone has taken a load of this material, everyone is actually complete. The quality of Russian crude should quickly return to normal, "said a fourth Russian oil buyer with a trading company.