May 24. 2024. 5:18

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Russia halts oil deliveries to Poland over lack of payments

The Russian Transneft company was supposed to pump Russian oil into Polish refineries at the end of February, but orders were not placed and paid, and, as a result, deliveries to Poland were excluded from the export program approved by the Energy Ministry of the Russian Federation, RIA Novosti reported.

On Saturday, Polish multinational oil refiner and petrol retailer PKN Orlen said it did not receive the oil deliveries from Russia through the Druzhba (Friendship) pipeline. The company’s chairman Daniel Obajtek noted that Poland was “well prepared” for such a scenario. “Only 10% of our oil came from Russia, and we will replace it with oil from other sources,” he tweeted.

He stressed that reducing the share of Russian oil is an element of the company’s diversification strategy for the last few years. Consequently, Orlen believes that suspending further deliveries by Russia will not impact the supply of oil products, including petrol and diesel, on the Polish market.

The company said it gave up buying Russian oil transported by sea soon after the war in Ukraine broke out, much earlier than the EU embargo was introduced.

Still, according to Michał Kozak, an analyst at Trigon DM, PKN Orlen is to lose 200,000,000 zlotys (€42,421,000) due to Russia cutting off the delivery of oil.

While in 2015, Orlen bought oil almost exclusively from Russia, the refiner now takes most of its oil from the North Sea, Western Africa, the Persian Gulf, and the Gulf of Mexico.

Meanwhile, the oil delivery through the Druzhba pipeline to Orlen’s refineries in Czechia has not been halted, Business Insider reported.

In the Czech Republic, the diversification of oil suppliers is not so easy, therefore, a rapid cut-off of deliveries might cause oil processing to fall to 50-60%, Kozak told the outlet.

One alternative is extending the Transalpine (TAL) pipeline, now running from Italy to Germany through Austria, allowing Czechia to import oil from the Adriatic. However, this investment will take a lot of time, the expert said.

(Aleksandra Krzysztoszek |