Russian firm stops oil to 3 European countries due to sanctions

• Ukrainian operator Ukrtransnafta stopped pumping Russian oil through Druzhba pipeline on August 4.
• Transneft said it could not receive transit fees due to European Union sanctions restrictions.
• Company has submitted a request to the authorised bank to obtain a permit to carry out payments.

Transneft, a Russian company, announced on Tuesday that Ukrainian operator Ukrtransnafta had stopped pumping Russian oil through the southern line of the Druzhba oil pipeline on August 4.

According to Russian state news agency TASS, Transneft said it could not receive transit fees due to European Union sanctions restrictions.

According to TASS, oil supplies via the southern Druzhba line to Hungary, the Czech Republic, and Slovakia have been suspended, while transit through Belarus to Poland and Germany continues.

“Ukrtransnafta suspended providing services on transportation of oil through Ukrainian territory starting August 4, 2022, due to the lack of receipt of monetary funds for services provided. The transit via the northern line of the Druzhba oil pipeline through Belarus towards Poland and Germany is per normal,” Transneft said, according to TASS.

Prepaid supplies were provided, but Transneft was unable to pay for transit services due to European Union sanctions, according to the company. Transneft made a payment on July 22, but it was returned to the company’s account, according to the company.

“As of now the European banks (correspondents) are no longer authorized to independently decide on the possibility of this or that transaction. To confirm the fact that the transaction is not among those banned it is necessary to obtain a permit from the national authorized state body. The fact that European regulators have not yet articulated a consensus on the algorithm of actions for banks in various jurisdictions, as well as the order of providing such permits, makes things even more complicated,” Transneft added, according to TASS.

According to TASS, Transneft has submitted a request to the authorised bank to transfer information to the European regulator in order to obtain a permit to carry out payments, while alternative payment options are also being developed.

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