Total and Eni have stopped payments for the contaminated oil sold to them by Rus...
MOSCOW - Total and Eni have stopped payments for the contaminated oil sold to them by Russian firms and said they will only pay when compensation is agreed, trading sources said, upping the stakes in what the sources say is Russia’s worst oil supply disruption.
Total and Eni are big buyers of Russian oil and are still purchasing it via multiple routes besides Druzhba, which is a major pipeline from Russia to Central Europe and Germany. “Why would anyone want to pay for this oil? Strictly speaking it is not oil and no one in Russia is able to explain clearly who will compensate whom and when,” one trading source familiar with the development said.
“Our position is clear. Western companies must pay and then submit claim damages that we can address later,” said a trading source with a major Russian producer. Russia’s only previous significant disruption of exports via Druzhba was at the end of the last decade when Moscow suspended shipments for three days over a pricing dispute with Belarus.The crisis has escalated since Belarus told oil refiners and pipeline operators in Europe nearly four weeks ago that the crude heading down the 5,500 km Druzhba pipeline was heavily contaminated with organic chloride, which is used to clean oil wells and accelerate the flow of crude.
Organic chloride should be removed before oil enters the supply chain as it can damage refining equipment. To get the pipeline working again the dirty oil needs to be removed and stored so it can be diluted with clean oil.
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