Germany has enough supply to cope with Russian oil pipeline halt

25 Apr, 2019

FRANKFURT: German refineries have adequate oil stocks to deal with a halt to import flows on the Russian Druzhba pipeline, a spokesman for industry group MWV said on Thursday.

Flows of Russian oil via the Druzhba pipeline have been suspended by Poland and Germany over quality issues. The pipeline can ship up to 1 million barrels per day and supplies Poland and Germany via a northern spur and the Czech Republic, Hungary and Slovakia via a southern leg.

"There are no supply or processing shortages," the spokesman for MWV, the Berlin association of oil majors, refineries and petrol stations, said.

Inventories at a big refinery in Schwedt, in eastern Germany near the pipeline, were well equipped, he said.

The potential release of oil stocks from Germany's strategic reserves, which would have to be commissioned by the Economy Ministry, were currently "not an issue for discussion," the spokesman said.

But the industry was looking into additional shipments to be arranged via the Baltic Sea port of Rostock, should the pipeline crisis drag on.

Germany has a diversified crude oil supply and import infrastructure, allowing it to ship oil from North Sea and Baltic Sea ports and on river barges in addition to pipelines.

The MWV spokesman said he could not gauge the volume or percentage share of contaminated oil on the pipeline that may have been received or how to get rid of it, as this would have to be verified by the operators.

MWV, the Mineraloelwirtschaftsverband, has 14 member companies including Total, Shell, and Rosneft.

The spokesman also could not say if there would be legal claims to compensate for loss of just-in-time shipments.

In 2018, Russia accounted for 36 percent of Germany's total crude oil imports of 85.2 million tonnes, according to figures from government trade statistics office BAFA.

"Overall, that is not easily replaceable," he said.

Eastern European countries have said they do not expect the halt of deliveries to last long.

Copyright Reuters, 2019

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