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. Last Updated: 07/27/2016

Oil to Estonia Faces Obstacles

Russian midsized oil product exporters are facing problems with transit via Estonia, traders said Friday, adding that they suspected Moscow still wanted to cut shipments due to rocky political relations with Tallinn.

Traders said problems had eased since May, when the route was shut for 10 days, but flows of gasoline and naphtha via Estonian ports were often impossible following recommendations by state railways to reroute volumes to other ports.

"The situation is very obscure. The biggest players are allowed to go to Estonia, but smaller firms have received orders to go to other ports," a trader with a Western major said. He said he had failed to clear gasoline bought from a Russian refiner for exports via Estonia in June and was forced to send the volumes to another port on the Baltic Sea.

Russian Railways, or RZD, said in May that it had started repairs on the Estonian route. Traders have said the move was a Kremlin reaction to a dispute with Tallinn over a World War II monument.

RZD said this week that the number of rail cars toward Estonia had been cut to 980 per day from the usual 1,500. It said it had asked products exporters to seek alternative ports in Lithuania and Latvia and requested that timber cargoes go via Finland and coal via Ukraine and Russia's Ust-Luga.

The biggest refined products exporters toward Estonia are Surgut's Kirishi refinery, plants belonging to TNK-BP and Gazprom Neft's Omsk and Yaroslavl refineries.