Millions of barrels of contaminated Russian oil have been stuck for weeks in pipelines from Belarus to Germany
A model of a pipeline is seen at the main entrance to the Gomel Transneft oil pumping station, southeast of Minsk. Picture: REUTERS/VASILY FEDOSENKO
For the buyers of an estimated 19-million barrels of contaminated crude stuck in the pipeline and loaded on tankers, it's a $1.2bn question. "We are ready to help sort out the problem and find solutions for the dirty oil. But we want Russian producers to come up with financial guarantees that they will help cover the costs," said a second buyer of Russian oil in Europe.
Russian oil flows via Druzhba were halted, sending crude to a six-month high above $75 a barrel and tarnishing Russia's reputation as an exporter at a time of rising competition with US and Middle Eastern oil sales. Traders estimate the process for all the contaminated oil in Druzhba would cost tens of millions of dollars.
But no money changes hands at this point as payment is usually due in the middle of the next month, meaning the bills for oil exported via Druzhba in April should be paid by mid-May. "You can of course say that I won't pay because I didn't get the right quality oil," said an executive at a major commodities trading house."But no one wants this nuclear option. We prefer responsible dialogue."
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