Russian Oil Supply To Czech Republic Cut Amid U.S. Sanctions | OilPrice.com
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Breaking News:
- Russian oil supply to the Czech Republic via the Druzhba pipeline was cut short on Tuesday.
- U.S. sanction-linked payment issues caused the disruption.
- The disruption forced refiner Unipetrol to ask to tap state reserves.
Russian oil supply to the Czech Republic via the Druzhba pipeline was cut short on Tuesday due to sanction-linked payment issues between Czech refineries’ Polish owner and Russian suppliers. According to CTK news agency, the disruption forced refiner Unipetrol to ask to tap state reserves, with the Czech government agreeing to release 330,000 metric tons of crude oil to the company.
Middlemen who supply Russian oil have stopped offering cargoes after the latest U.S. sanctions imposed by the Biden administration targeting Russian producers, tankers and insurers, Bharat Petroleum CFO revealed in January. The sanctions targeted Surgutneftgas and Gazprom Neft, two Russian oil firms that handle 25% of Russian oil exports. The two companies shipped an average of 970,000 bbls a day in 2024. Bharat Petroleum and other Indian state refiners buy Russian oil in the spot market, mainly from traders.
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According to commodity analysts at Standard Chartered, the restrictions roughly triple the number of directly sanctioned Russian crude oil tankers, enough to affect around 900 thousand barrels per day (kb/d). Whereas it’s highly likely that Russia will try to circumvent the sanctions by employing even more shadow fleet tankers and ship-to-ship transfers, StanChart sees 500kb/d of displacements over the next six months.
“We have not received any new offers for the March window (delivery). Traders are asking us to wait. We are waiting to get offers,” Vetsa Ramakrishna Gupta told Reuters on Wednesday.
“We are not expecting the similar number of cargoes that we used to get in the months of December and January,” he added.
Earlier, India announced that it will abide by the sanctions and turn away sanctioned tankers. Previously, we reported that the sanctions would severely disrupt Russian oil exports to India and China–the biggest buyers of Russian crude–and could also give Trump more leverage in future negotiations as he tries to end the war in Ukraine.
Last year, India briefly overtook China as the largest buyer of Russian crude. However, India’s import of Russian oil in November plummeted 55% Y/Y to its lowest point since June 2022. This could be the result of the country trying to diversify its oil supplies to avoid overlying on a single country.
By Alex Kimani for Oilprice.com
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