May 2, 2019 / 1:13 PM / 17 days ago

Clean oil arrives in Belarus as Russia tackles tainted fuel flows

MOSCOW/MINSK (Reuters) - Belarus said on Thursday that clean oil had reached it via the Druzhba pipeline from Russia, after several countries suspended such imports due to a contamination scandal that shocked the oil market and forced some states to open up strategic reserves.

Poland, Germany, Ukraine, Slovakia and other countries halted Russian oil imports via the pipeline last week after finding contaminants that could damage refinery equipment.

Russian President Vladimir Putin called the incident damaging for Russia’s image as a safe energy supplier, while pipeline monopoly Transneft said the oil had been contaminated deliberately.

A spokesman for Belarusian state oil firm Belneftekhim confirmed clean oil had arrived but reiterated that the company expected it to reach the Mozyr refinery, one of the country’s two oil plants, no earlier than May 4.

The Russian energy ministry confirmed that clean oil reached Belarus on Thursday, saying the quality of oil was also expected to improve by May 7 at the Baltic Sea port of Ust-Luga.

Druzhba can pump up to 1 million barrels per day (bpd), amounting to 1 percent of global crude demand. In total, Russia is exporting around 4 million bpd and other destinations in the south, northwest and east are unaffected, traders have said.

A long outage could force refineries in Eastern Europe and Germany to cut operations and prompt Moscow to reduce oil production. It could also trigger claims by Western oil buyers against Russian producers and pipeline monopoly Transneft for lost profits as they struggle to sell contaminated oil.

Poland’s energy ministry has decided to release mandatory oil reserves to secure output at domestic refineries. The released reserves are to ensure continuity of refinery processing at normal levels, a ministry spokeswoman said.

The Czech oil refinery at Litvinov has also started receiving oil from state emergency reserves due to a halt in Russian supplies.

Shareholders of two German refineries are arranging crude tanker shipments via the Baltic Sea in response to the Druzhba suspension, a spokesman for industry group MWV said.

Reporting by Vladimir Soldatkin in Moscow, Andrei Makhovsky in Minsk, Vera Eckert in Frakfurt, Jan Lopatka in Prague and Agnieszka Barteczko in Warsaw; Editing by Dale Hudson and Jason Neely

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