MOSCOW/LONDON: It was a quiet Easter holiday at the offices of major European oil companies and refiners when an email in Russian landed."What the hell does it say?" one manager recalled thinking as he sent it to his Moscow office for translation.
"I have to rely on gossip and rumor to get an idea when clean oil will resume flowing," said a trading manager at a Western oil company which had to suspend purchases of Russian oil in Germany, which is connected to Druzhba via Poland.sentifi.comTransneft moves about 10 million barrels of oil a day in Russia and exports more than 4 million barrels a day.
The oil was contaminated with organic chlorides, compounds used in the industry to boost extraction from oilfields by cleaning oil wells and accelerating the flow of crude. "This oil is not sellable. You cannot just dump the price and sell it at a discount. No one wants this oil," a second source at a Western oil company said.
"This will take months and Russian exports and even production may have to fall," said Sen at Energy Aspects, adding that European countries might have to tap strategic oil stocks if the outage lasts longer.Taken by surprise and left in the dark by a lack of communication from Transneft about how long the crisis will take to resolve, Western buyers of Russian oil have started looking at ways to shield themselves from further losses.
At least 10 tankers with a combined 1 million tonnes of contaminated oil - worth more than US$500 million at current prices - have already sailed from Ust Luga, according to a dozen traders.
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