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Ukraine Halts Transport of Russian Oil to Southern Europe Due to Payment Issues

Ukraine has suspended the transit of Russian oil to Southern Europe since August 4, as it has not received transit fees from Moscow due to Western sanctions, Russian energy company Transneft announced on Tuesday.

Transneft stated that it paid the transit fee for August to the Ukrainian pipeline operator Ukrtransnafta on July 22, but the money was returned on July 28 because the payment did not go through.

Gazprombank, which processed the payment, stated that the money was returned due to EU restrictions.

Russia supplies about 250,000 barrels of oil per day (bpd) via the Druzhba pipeline to Hungary, Slovakia, and the Czech Republic.

Hungarian MOL and Unipetrol, controlled by PKN Orlen, are the main buyers of oil through this route, while Russian Lukoil, Rosneft, and Tatneft are the main suppliers.

MOL, PKN Orlen, and Ukrtransnafta did not immediately respond to Reuters’ requests for comment.

Russia has already reduced gas flows to many EU member states, justifying this by citing maintenance issues with turbines on the Nord Stream 1 pipeline, as well as sanctions against some buyers that Moscow considers hostile.