Report: Russia’s Bashneft stops sending oil to Hungary via pipeline

MOSCOW, Nov 8 (PRIME) -- Russia's Bashneft has stopped sending oil to Hungary and Slovakia through the Druzhba pipeline in what traders believe reflects a change in marketing strategy under Bashneft's new owner Rosneft, Reuters reported late Monday, citing industry sources.

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 rubles for a 50.1% stake in Bashneft and is now seeking government approval to buy up to 100% 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 E.U. countries such as Slovakia and Hungary.

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