Major oil companies refuse to pay dirty Russian crude



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The big Western oil companies, Total and Eni, have suspended payments to Russian companies that sold them contaminated crude via the Druzhba pipeline as part of a new controversy over what commercial sources described to Reuters as " the biggest disruption of the Russian oil supply.

Last month, Russia interrupted the supply of several European countries via the Druzhba pipeline due to a contamination problem that the Russians have described as deliberate.

The oil was contaminated with organic chlorine, a substance used in the production of oil to increase production but dangerous in high quantity for the refining equipment. Quantities of the chemical have been found to be much higher than the maximum amount allowed.

According to the Russian Ministry of Energy, normal pipeline deliveries are expected to resume in the second half of May.

The Russian pipeline operator Transneft will compensate its customers for the losses they suffered as a result of contaminated crude oil, said Russian Deputy Prime Minister Dmitry Kozak last week, stressing that refiners needed First, to prove their damages and losses in order to claim compensation.

Deliveries via the Droujba pipeline are made in accordance with Russian law, under which the buyers pay first and, if they are not satisfied with the quality of the crude, they can ask for compensation and compensation.

Related: The number of US oil rigs hit a 14-month low

According to commercial sources of Reuters, Western companies, including Eni and Total, have informed their Russian suppliers, including Rosneft, that they would not pay for contaminated oil payments due on May 15. Western buyers are ready to pay When damage becomes obvious and clean oil reserves resume, Reuters sources say.

Contamination of Russian oil reserves has disrupted some companies' refining activities. Total, for example, last week shut down some units at its Leuna refinery (230,000 bpd) in Germany for technical inspections. Thursday, declared force majeure on shipments of refined petroleum products from the Leuna refinery.

At the same time, commodities trading companies Vitol and Unipec are trying to sell some of the contaminated Russian crude refused by European refiners to Asian buyers. Chinese independent refiners are the main target buyers, but no one really knows how much the crude should cost, how much would it cost to dilute it with clean oil to reduce chlorine levels, and if it is possible to refining, trading sources say Reuters.

By Tsvetana Paraskova for Oilprice.com

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