Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

LUKoil Reaches Deal on Oil Supply

LUKoil has reached an oil supply deal with Germany, the company said Tuesday after cutting supplies by a third in July during a pricing dispute with a crude importer.

"Our supplies will return to normal in September. We will fully cover the needs of the German side," LUKoil spokesman Vladimir Semakov said.

Oil traders said LUKoil's cut was an attempt to win better terms from Germany's monopoly importer of Russian crude, Sunimex, while German refiners were unwilling to switch to direct supply contracts with LUKoil.

On Tuesday, trading sources said the company would supply around 500,000 tons in September via the Druzhba pipeline after Sunimex agreed to increase purchase prices.

Germany's PCK refinery at Schwedt said Tuesday that its supplies from Russia had begun to normalize. Last week the refiner said the supplies had been reduced in the previous few days, and that it had to seek alternative sources.

Russia was scheduled to supply Germany with 5.5 million tons of oil in the third quarter. Of that total, LUKoil was due to supply 1.8 million tons, Surgutneftegaz 2.5 million tons, Slavneft 192,000 tons, Tatneft 300,000 tons, small producers some 368,000 tons and Belarus 190,000 tons.