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Ukrtransnafta suspends transit of oil from Russia through Ukraine, Transneft says

It is reported that supplies were carried out on a prepaid basis, but Transneft could not pay for transit services due to the European Union’s sanctions

MOSCOW, August 9. /TASS/. Transneft has reported that Ukrtransnafta suspended the pumping of Russian oil via the southern line of the Druzhba oil pipeline on August 4. Oil was supplied via the southern line of Druzhba to Hungary, the Czech Republic, and Slovakia. Meanwhile, the transit through Belarus towards 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," the company said.

Supplies were carried out on a prepaid basis. Transneft said it could not pay for transit services due to the European Union’s sanctions. The payment made on July 22 was returned to the company’s account.

"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.

To solve the issue the company has submitted a request to the authorized bank for transfer of information to the European regulator to obtain a permit to carry out payments under the agreement with Ukrtransnafta. Alternative options for making payments are also being developed.

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