Bashneft stops sending oil to Hungary, Slovakia via Druzhba pipeline - sources
- Wall St. edges higher, supported by banks, telecoms
- Equinix (EQIX) Announces $3.6B Acquisition of Data Center Portfolio from Verzion (VZ)
- Deal Progress Said to Slow as Johnson & Johnson (JNJ) Puts Actelion (ALIOY) Under Microscope - Source
- Trump Wants to Cancel New Air Force One Order with Boeing (BA)
- Roper Industries (ROP) to acquire Deltek in $2.8B Deal
A worker at an oil field owned by Bashneft, Bashkortostan, Russia, January 28, 2015. REUTERS/Sergei Karpukhin/File Photo
Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.
MOSCOW (Reuters) - Russia's Bashneft
Bashneft had an export quota of 525,000 tonnes via the Druzhba pipeline to Slovakia and Hungary in October-December 2016. In October, it shipped around 180,000 tonnes of oil in line with the export schedule, traders said.
Bashneft has exported oil through the pipeline for the last four years, selling it via Belize-based trading firm Normeston under a long-term contract.
But since the start of November, Bashneft has stopped sending oil to Slovakia and Hungary via the Druzhba pipeline, industry sources said.
Traders believe the cut-off is related to changes Rosneft has made to Bashneft's trading practices and export destinations since the state-controlled Russian energy major acquired a controlling stake in Bashneft last month.
Rosneft paid 330 billion roubles ($5.2 billion) for a 50.1 percent stake in Bashneft and is now seeking government approval to buy up to 100 percent of Bashneft.
Traders believe that Bashneft will now stop trading its crude oil via Normeston as Rosneft's management favors direct contracts with end-users.
Traders think that Rosneft diverted Bashneft oil intended for Slovakia and Hungary to the ports. Rosneft and Bashneft each got extra positions in the November loading plan as of the start of last week.
Rosneft did not immediately reply to a Reuters request for comment. Hungarian energy company MOL is the only end buyer of crude oil from Russia delivered to Hungary and Slovakia.
Apart from Bashneft, Lukoil, Russneft and small independent Russian producers supply crude oil to Hungary and Slovakia. MOL also imports various Mediterranean grades via the port of Omisalj.
Traders saw no political overtones to the decision to stop sending oil via the pipeline and believe Hungary and Slokavia should easily be able to make up for the shortfall in oil imports by buying more from its main supplier - Lukoil.
Moscow has in the past used energy supplies as a political and economic tool, responding to natural gas price disputes with Ukraine for example by cutting off supplies, affecting its European clients further down its pipelines.
With tensions between Russia and Ukraine running high since Moscow's seizure of Crimea in March 2014, Ukraine has increased its ability to import gas from EU countries such as Slovakia and Hungary.
(Reporting by Olga Yagova; Editing by Adrian Croft)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- House panel quizzes EPA on VW zero emission vehicle fund
- Los Angeles heightens security after threat to metro system
- Junk energy companies rush to primary market
Create E-mail Alert Related CategoriesReuters
Related EntitiesCrude Oil
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!