Fitch: Russian Oil Deliveries to Central Europe Become Less Reliable :: Charter'97 :: News

Recent irregularities in oil deliveries from Russia through pipeline Druzhba via Belarus to Poland and Germany put into the limelight decreased reliability of Russian oil supplies to Central Europe. “Belarus is a key country for Russian oil transit to Central Europe, considering that the three parts of Druzhba pipeline pass through it,” Fitch group Associate Director Arkadiusz Wicik said to Reuters.

Oil refineries of Central Europe depend on Russian oil significantly, Fitch notes.

At the same time, Fitch believes that the recent troubles do not necessarily mean Central European oil refineries’ ratings should be decreased, considering the level of required reserve of crude oil and fuel in Central European countries of the EU. Thus, in Poland stock will suffice for 80 days.

Oil refineries of Central Europe can also use alternative ways of deliveries. Polish refineries, for instance, could use terminals in Gdansk.

However, in case deliveries would not be resumed for a long time, Fitch could review ratings, as a shortage of supplies via pipelines would be compensated by sea import, or would force to buy dearer oil produced in the Middle East or North Sea.

This scenario could considerably influence revenue of Central European refineries, which is one of the highest in Europe at the moment because of the margin between the costs of Russian oil and Brent oil.