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. Last Updated: 07/27/2016

Ukraine Reopens Oil Flow From Russia to East Europe

A three-day interruption of oil supplies from Russia to Eastern Europe ended Thursday as the Russian exporter promised to pay higher transit tariffs in Ukraine, officials said.


The Russian exporter, Surgutneftegaz, sent a telegram to the Ukrainian pipeline operator Druzhba on Thursday morning, promising to pay for a shipment of 219,000 tons of crude oil.


This is twice the amount usually supplied daily to the Czech Republic, Hungary and Slovakia, according to Oksana Marchuk, a Ukrainian foreign trade official.


Marchuk said she expected Surgutneftegaz to pledge further payments before the weekend to ensure regular pumping in the future.


The Ukrainian operators of the Druzhba line, the only oil pipeline from Russia to the three Eastern European countries, had refused to deliver Russian oil because Surgutneftegaz failed to sign a contract agreeing to pay new transit fees of $2.5 per ton, up from $1.3 per ton, Marchuk said. The fees were introduced as of Jan. 1 and pumping was stopped Monday.


Yury Sipovsky, vice president of the Russian transporter Transneft, said the Ukrainian government had raised the tariffs without previously consulting the Russian Fuel and Energy Ministry, as envisaged in a previous agreement between the two countries.


"Ukraine raised the tariffs unilaterally, so the producer refused to pay," Sipovsky said.


He said Surgutneftegaz and Druzhba had found a provisional solution, and was confident that the two companies would arrange for a longer-term contract within a week.


The flow resumed Thursday at about 3 P.M. Moscow time, Marchuk said.


The cutback did not seriously affect the fuel market in the Czech Republic or in Slovakia.


However it did force the largest Czech refinery in Litvinov to draw from state reserves, according to Reuters.


The Slovakian refiner Slovnaft said in a statement Wednesday that it had not cut its deliveries of refined fuel to domestic customers, but that exports had been scaled back, Reuters reported.


Slovnaft said it would bring the exports back to full scale 24 hours after the supplies were resumed.


Czech government spokeswoman Jana Hejskova told The Associated Press that there was no reason for panic and that the country had enough fuel reserves to last for several months. This year the Czech Republic plans to import 7 million tons of crude, according to the news agency.


The Czech Republic, Slovakia and Hungary depend largely on Russia for crude oil. The Czech Republic is building an alternative pipeline to Germany to relieve its dependency on the route through Ukraine.