LONDON (Reuters) - Poland, Hungary and the Czech Republic are offering their domestic refiners about 8 million barrels of oil from strategic reserves after supplies from Russia’s Druzhba pipeline to Europe were halted, industry sources said on Friday.
Oil in the one-million-barrel-per-day pipeline running from Russia via Belarus to eastern Europe and as far west as Germany was contaminated by chemicals used in extracting crude but which can damage refineries if it is not removed before processing.
Germany and Slovakia have yet to decide whether to release any crude stocks to refineries affected on their territory.
The volume of reserves offered so far is equivalent to about 11 seaborne cargoes loaded from Russia’s Baltic Sea ports.
Oil at the Baltic port of Ust-Luga was also contaminated by organic chloride, but crude pumped to nearby Primorsk port and the Russian Black Sea port of Novorossiisk was not affected.
Refiners have been scrambling for replacement barrels in a bid to avoid cutting the volumes they process. But some refiners have had to reduce their runs, traders said.
The price of Primorsk Urals crude hit a record high on Thursday, trading at dated Brent plus 90 cents. Demand for North Sea grades also climbed, with the Forties grade price rising by about 70 cents a barrel since last week.
Traders said Total’s 240,000 barrel-per-day Leuna refinery in Germany had cut refining runs by about 30 percent because of the contamination but exact details were not immediately possible to confirm. Total declined to comment.
Flows through Ust-Luga are expected to return to normal quality by the start of next week.
Reporting by Dmitry Zhdannikov; Additional reporting by Julia Payne, editing by Jason Neely