June 12, 2019 / 6:54 PM / 4 days ago

Backstory: Following the flow of Russia's dirty oil

LONDON (Reuters) - The first sign of the crisis in Russia’s oil industry came on a quiet Saturday in April.

FILE PHOTO: An oil storage tank of Russian oil pipeline monopoly Transneft is pictured at the Baltic Sea port of Ust-Luga, Russia February 26, 2018. REUTERS/Vladimir Soldatkin

Officials in neighboring Belarus issued a statement saying the quality of the oil coming across the border was poor - on its own hardly a startling assertion.

Belarus is not a major player in the global oil game. Many commentators wrote off the complaint as the latest round in a public relations war between Belarus leader Alexander Lukashenko and his sometimes ally sometimes foe, Russian President Vladimir Putin.

The true scale of the story only emerged as a team of seven Reuters correspondents started putting in calls and popping round to see contacts in oil trading firms across Poland, Germany, Ukraine, Slovakia, Hungary and the Czech Republic.

More than a dozen traders told us tests of the Russian crude they had received via the transit hub of Belarus were showing levels of the chemical organic chloride 15 to 30 times above the norm.

The trick to keeping track of it all it was having the right contacts in the right places who could tell us where the contaminated oil was spreading.

Once the team of Reuters correspondents had pieced it all together, it was clear this was a big deal. At normal levels, organic chloride is a useful additive that boosts the flow of oil. In the wrong dilution, it destroys refining equipment.

And the Russian oil that came through Belarus was flowing on and on into the industrial heart of the European Union.”The important thing for us from the beginning was to assume nothing, approach the story open-minded and just dig,” said Dmitry Zhdannikov, Reuters energy editor for Europe, the Middle East and Africa.

Moscow initially declined to comment then played down the story, disputing the amount of the oil involved.

Our energy reporting teams in Moscow and London pressed on and became the first to realize that Russia’s oil industry, the world’s third largest after the United States and Saudi Arabia, was facing its worst ever disruption.

One Reuters scoop revealing that Germany, Poland, Slovakia had halted oil imports via the affected pipeline pushed oil prices to a six-month high above $75 per barrel.

Six weeks after the first reports of the contamination, the facts, figures and stories have kept flowing. And the reporters have kept calling.

The story of where the organic chloride came from in the first place and how it got into the pipeline is still unfolding.

Editing by Andrew Heavens

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