is the largest emergency in the history of the Russian oil industry, which also affected Kazakhstan

The shutdown of Russia’s most important oil pipeline due to chlorides entering it is an unprecedented event in the history of Russian energy exports to Europe.

The USSR built “Druzhba” in the 1960s to provide fuel for the socialist countries. Today, Poland and Germany are supplied along the northern branch, Hungary, Slovakia and the Czech Republic along the southern branch.

The key transit country for “Druzhba” is Belarus: near the city of Mazyr, oil from Russia is distributed to the northern and southern branches. On April 19, 2019, the Belarusian state concern Belneftekhim announced that in recent days, the quality of the Russian Urals export mix has deteriorated sharply. The content of organochlorine in it is ten times higher than the norm: 150-300 ppm instead of the maximum allowable 10 ppm. Poland and then Belarus stop “Druzhba” on April 24, a day later, Ukraine stops transit along the southern branch. Goods from Russia are contaminated with dichloroethane. This substance is used to increase the return of depleted deposits, but then they must certainly be separated from the extracted oil. Experts admit that about a monthly pumping volume has been spoiled - up to 5 million tons or 37 million barrels.

President of Belarus Alexander Lukashenko begins to demand compensation from Russia. The country is losing transit potential due to a shortage of high-quality raw materials, its two refineries are working half-heartedly and stop exporting petroleum products, in addition, the Mozyr oil refinery claims to have broken some of the equipment.

In Russia, dirty raw materials are not only in the “Druzhba” pipeline. From it, it enters the Baltic Pipeline System-2 and through it reaches the export oil terminal of the port of Ust-Luga. There, oil with organochlorine is poured into tankers and sent to the EU countries, but European buyers refuse to take it. There are reports that China ready to accept oil.

Traditionally, Druzhba’s largest customers are two refineries in East Germany. The Total concern has been hiding for a long time that dirty oil has got into its plant in Loyne, and only on May 17 admits that it suspended the work of a number of installations “for technical inspection”. And on May 29, it turns out that the company, due to interrupted supply of Druzhba, is forced to work half its capacity.

The second East German client of “Druzhba” is the PCK refinery in Schwedt. Its co-owners, the Russian state-owned company “Rosneft” and the BritishDutch concern Shell, are silent about the losses of the plant, which turned out to be within 7 weeks without deliveries via “Druzhba”. But the head of “Rosneft”, Igor Sechin, wrote a letter to the Russian government at the end of May, demanding that both the exporter and the consignee put pressure on “Transneft” for compensation.

On June 9, net oil via the northern branch of “Druzhba” arrives from Belarus to Poland, then reaches Germany. Prior to this, transit through Ukraine to Slovakia (May 23), the Czech Republic (May 27) and Hungary (May 29) is being restored.

At the end of June, it became known that the Russian operator “Transneft” would pay compensation to Kazakhstani pipeline operator “KazTransOil” for oil contaminated in the Baltic port of Ust-Luga. At the same time, the amount of compensation may be about $76 million (according to Bloomberg sources). According to traders, the volume of contaminated Kazakhstani export oil is 700 thousand tons of about 5 million tons of substandard raw materials that fell into the “Transneft” pipeline system.

“KazTransOil” is the first pollution-affected party with which “Transneft” agreed on compensation. In transit through the pipes of “Transneft”, oil of Azerbaijan and Turkmenistan is also exported. As of the end of June, agreements with them were not known, and the amount of compensation to Belarus and other European countries where dirty oil had been delivered or to which supplies of raw materials had ceased due to suspension of pumping was not determined.

On July 24, a meeting of the Board of Directors of “Transneft” was held, at which the issue of resolving the consequences of the incident with “Druzhba” was considered. The Board of Directors has set a limit on payments to shippers under contracts for the provision of oil transportation services at $15 per barrel of substandard oil. At the same time, shippers must document their property losses.

The OSCE Parliamentary Assembly adopted a resolution against “Nord Stream 2” and “Turkish Stream” (July 7, 2019)

An amendment expressing particular concern regarding the implementation of the projects was introduced by a group of parliamentarians from the United States, Lithuania and Canada.

The resolution, in which the “Nord Stream-2” and “Turkish Stream” gas pipelines are called potential means of political and economic pressure on supplydependent countries, was adopted by the Political and Security Committee of the OSCE Parliamentary Assembly. The author of the resolution entitled “Energy Security in the OSCE Area” is Ruta Miliute, a parliamentarian from Lithuania. An amendment expressing particular concern regarding the implementation of the “Nord Stream 2” and “Turkish Stream” projects was introduced by a group of parliamentarians from the United States, Lithuania and Canada.

The resolution, “Vedomosti” notes, calls on the governments of the OSCE participating states to abandon the use of energy as an instrument of subordination and influence on countries that depend on imports, supply or transit of energy.

“Nord Stream 2” is the trans-Baltic gas pipeline of Gazprom, which should connect Russia and Germany. It will carry out direct deliveries of Russian gas to Europe, bypassing Ukraine. The commissioning of the gas pipeline is planned at the end of this year. The design capacity of the pipe is 55 billion cubic meters per year. The project cost is almost 10 billion euros. The pipeline may not be launched on time due to the position of Denmark, which is delaying the issuance of permission to lay wires in its territorial waters. The “Nord Stream 2” gas pipeline operator and other European countries where dirty oil had been delivered or to which supplies of raw materials had ceased due to suspension of pumping was not determined. On July 24, a meeting of the Board of Directors of “Transneft” was held, at which the issue of resolving the consequences of the incident with “Druzhba” was considered. The Board of Directors has set a limit on payments to shippers under contracts for the provision of oil transportation services at $15 per barrel of substandard oil. At the same time, shippers must document their property losses. has received permission to lay the pipeline from all countries whose territorial waters are affected by the route except Denmark. The operator company has already submitted three route options for approval by Copenhagen: the second and third routes do not pass through the territorial waters of Denmark, but affect only the exclusive economic zone of Denmark in the Baltic Sea near the island of Bornholm.

The “Turkish Stream” is a gas pipeline from Russia to Turkey through the Black Sea. The first line is intended for gas supplies to Turkish consumers, the second - for gas supply to the countries of Southern and Southeast Europe. The capacity of the first and second threads is 15.75 billion cubic meters each. Commissioning is scheduled for the end of the year.

Sources: ria.ru, novayagazeta.ru, gazprom.com

The first ever batch of oil from the United States arrived at the port of Odessa

In July 2019, a tanker delivered 75 thousand tons of American Bakken oil to the Odessa port. They are going to process it at the Kremenchug refinery.

The Wisdom Venture tanker, whose length is 237 meters, delivered Hong Kong flag on Saturday, July 6, to the port of Odessa, 75 thousand tons of American Bakken oil. This was reported by the press service of the administration of the Odessa seaport.

The port is fully ready to receive oil, said the head of his administration, Igor Tkachuk.

“At one time, large volumes of oil were transited through the port from Russia and Kazakhstan, Venezuelan for the Mozyr refinery in Belarus. A new transshipment from the US will also be provided with high-quality transshipment service,” he said.

According to the publication of the Business Information Network, a batch of oil was acquired by the public joint-stock company “Ukrtatnafta” for refining at the facilities of the Kremenchug refinery. Reception of oil in onshore tanks will take about a day and a half.

The Odessa port reports that this is the first in the history of Ukraine oil supply directly from the United States. In April, Russia imposed a ban on the export of oil and petroleum products to Ukraine. According to Russian Prime Minister Dmitry Medvedev, such a decision was made in response to the “unfriendly actions of Ukraine. “Bakken oil is produced from the Bakken wells located in the states of North Dakota and Montana in the United States, and also partially in the Canadian provinces of Saskatchewan and Manitoba. In the 2000s, the field began active oil production from oil shale (shale oil) by the methods of oblique horizontal drilling and hydraulic fracturing.

Sources: rbc.ru, dw.com

Ineos invests $2 billion in the construction of factories in Saudi Arabia

British energy company Ineos plans to invest $2 billion (1.6 billion pounds) in the construction of its first plants in Saudi Arabia.

Ineos Group signed a memorandum of understanding with Total and Saudi Aramco on the construction of three petrochemical plants in the Jubail 2 industrial zone in Saudi Arabia.

These facilities will produce chemicals for industries such as automotive, aerospace and electronics.

Ineos in particular plans to build an acrylonitrile plant with a capacity of 425 thousand tons per year by 2025. This will be the first plant of its kind in the Middle East. In addition, Ineos will build a plant for the production of linear alpha olefins (LinearAlphaOlefin) with a capacity of 400 thousand tons and launch the production of polyalphaolefins (PolyAlphaOlefin). Launch of production is also scheduled for 2025. Ineos chairman Jim Ratcliffe called the signing of the memorandum “an important milestone that marks our first investment in the Middle East,” BBC reports.

Sources : pfj.ru, nangs.org

USA creates a military coalition to protect oil tankers in the Gulf region

The United States - amid tensions with Iran - intends to create a military coalition to protect oil tankers in the Gulf region. “We are negotiating with a number of countries to find out if we can create a coalition to ensure freedom of navigation in the Strait of Hormuz and the Bab el Mandeb Strait,” General Joseph Dunford, chairman of the Joint Chiefs of Staff of the United States Armed Forces, said in Washington on July 9, 2019.

According to him, in the near future it will become clear which countries have the political will to participate in such a mission, and then the question will be asked whether they are ready to make a military contribution to its implementation. The American general noted that the United States is ready to share its know-how and means of monitoring shipping. Civilian vessels, Dunford noted, can be escorted by the ships of the country whose flag they fly.

A third of the world’s oil transported by sea passes through the Strait of Hormuz, connecting the Persian and Oman gulfs, notes DW. The Bab el Mandeb Strait at the entrance to the Red Sea is also one of the most important shipping routes in the world. On May 12 and June 12, attacks on oil tankers occurred in the Gulf of Oman. The United States blamed Iran for the incident, but Tehran has denied any involvement in these incidents.

According to news at the end of August this year, the United Kingdom, Poland, Bahrain, and Australia joined the coalition. The authorities of Japan and South Korea are still pondering over a request from Washington. Official Berlin rejected the US proposal, indicating that it was considering the feasibility of creating a separate European coalition to protect merchant shipping in the Strait of Hormuz (linking the Persian Gulf to the Arabian Sea).

Sources: oilcapital.ru, eadaily.com

US authorities extended Chevron›s license to operate in Venezuela until January 22, 2020

In the beginning of July 2019, news appeared that the United States was allowing the possibility of extending the license of the American oil and gas company Chevron to work in Venezuela, despite the US sanctions imposed on this country. This was reported by the head of the White House National Economic Council, Larry Cadlow. The license of the American company was due to expire on July 27.

As a result, the U.S. Treasury Department renewed Chevron’s license to operate in Venezuela for two three-month periods: at first until October 25, 2019, then until January 22, 2020. The license involves doing business with the Venezuelan state-owned company PDVSA. In addition, the oilfield services corporations Halliburton, Schlumberger, Baker Hughes, Weatherford were also allowed to continue their work in Venezuela.

Note: on January 23, 2019, the Venezuelan opposition leader Juan Guaido proclaimed himself interim president. He was supported by several European countries, as well as the United States. On January 28, Washington imposed sanctions on Venezuelan state oil company PDVSA, blocking the company’s assets and interests in its jurisdiction for $7 billion, and also banned transactions with them. At the same time, the U.S. Treasury Department issued special temporary licenses to Chevron and four oilfield service companies for operations in Venezuela (for six months).

Sources: bloomberg.com, news.ru, reuters.com

Oil tanker detained in Gibraltar at US request

On this issue, the Iranian Foreign Ministry called “on the carpet” the British ambassador to Tehran. On July 4, 2019, a supertanker with oil, supposedly intended for Syria, was detained in Gibraltar, media reported. Tanker Grace 1 under the flag of Panama was detained by the authorities of the territory on suspicion of violating the oil embargo against Syria. According to the Acting Minister of Foreign Affairs of Spain, Josep Borrel, the detention occurred at the request of the United States.

Gibraltar authorities say they have “reasonable grounds” to believe that the tanker was transporting oil to the Baniyas refinery in the Syrian province of Tartus. This plant is owned by a company that is under EU sanctions. Gibraltar Chief Minister Fabian Picardo has already sent a letter to the heads of the European Commission and the European Council explaining the actions taken by the Gibraltar authorities in accordance with EU rules.

“We are studying the circumstances in which it happened. This was a request that the United States sent to the United Kingdom. We are looking at how this affects our sovereignty, in the sense that it happened in the waters, which, as we understand Spain, ”explained Josep Borrell.

The spokesman for the British government’s office, in turn, said: “We welcome these decisive actions to ensure the implementation of EU sanctions against the Syrian regime. We welcome the decisions of the Gibraltar authorities who conducted this operation. All this should give a clear signal that violation of The arrest of the Iranian tanker Grace 1 Oil tanker detained in Gibraltar at US request sanctions is unacceptable, ”a government spokesman told reporters on Thursday.

On the evening of the same day, the Iranian Foreign Ministry announced that the British ambassador to Tehran, Robert Makar, was called to the ministry to express “his strong objection to the illegal and unacceptable capture” of Grace 1.

Gibraltar released the Iranian tanker 45 days after its detention in the waters of the state. The state made this decision, despite the US request for the detention of the ship. Washington, in turn, is interested in this, because it wants to achieve the confiscation of oil on board the vessel, which violated US sanctions. Iran called the decision of Gibraltar a victory of diplomacy and the failure of the White House policy.

EU sanctions against Syria prohibit European business contacts with Syria, especially in the oil and petroleum products trade. Sanctions introduced in 2011. Gibraltar is the overseas territory of Great Britain, disputed by Spain, in the south of the Iberian Peninsula, including the Rock of Gibraltar and the sandy isthmus connecting the rock with the Iberian Peninsula. Enters the EU through UK membership. The territory is the NATO naval base.

Sources: gazeta.ru, aljazeera.com

According to Damascus, the captured tanker was not heading to Syria, there is no evidence to the contrary

According to news from July 11, 2019, Syria denied that Iranian oil on a tanker captured in Gibraltar was destined for one of the country’s refineries.

The Iranian tanker detained in Gibraltar was not waiting for a single Syrian port, the link with the Syrian refinery of the Baniyas port, which the British intelligence services insist on, is fundamentally incorrect, the Syrian Parliament’s Foreign Affairs Committee told Izvestia. They recognized that the country really continues to purchase Iranian oil, but they go through other channels. In Damascus, they called on London to release the oil tanker, since the British have no legal grounds for detaining the ship.

“There is not a single official confirmation that the tanker was heading to Syria. I know for certain that our ports did not expect a ship with a similar name and registration number, ”said Deputy Chairman of the Committee on Foreign Affairs Ammar al-Assad. “Nevertheless, our country has the right to purchase oil from any state, for this we do not need permission from London or Washington.”

Source: iz.ru

World oil demand in 2020 will exceed 100 million barrels per day

The cartel changed its forecasts in its July report of the current year. According to OPEC forecasts, world oil consumption in 2020 will increase by 1.14 million barrels per day, as a result of which global demand will cross the sign barrier of 100 million barrels per day. Consumption in OECD countries, the cartel said in a July report, will increase by 90 thousand barrels per day. On the whole, positive dynamics is expected only in the countries of the Americas, and in Europe and the Asia-Pacific region demand will decrease, the document says. Thus, the annual oil consumption in the world will be 101.01 million barrels per day.

“Factors that may affect the growth rate of oil demand in 2020 include macroeconomic changes in major consumer countries, the displacement of heavy distillates with natural gas and other fuels, subsidy programs and plans for their termination, the consequences of commissioning / delays / the closure of mega-projects in the field of processing and programs to reduce fuel consumption, especially in the transport sector, ”the OPEC report said.

The cartel changed its forecasts in its July report of the current year.According to OPEC forecasts, world oil consumption in 2020 will increase by 1.14 million barrels per day, as a result of which global demand will cross the sign barrier of 100 million barrels per day. Consumption in OECD countries, the cartel said in a July report, will increase by 90 thousand barrels per day. On the whole, positive dynamics is expected only in the countries of the Americas, and in Europe and the Asia-Pacific region demand will decrease, the document says. Thus, the annual oil consumption in the world will be 101.01 million barrels per day.

“Factors that may affect the growth rate of oil demand in 2020 include macroeconomic changes in major consumer countries, the displacement of heavy distillates with natural gas and other fuels, OPEC forecasts World oil demand in 2020 will exceed 100 million barrels per day subsidy programs and plans for their termination, the consequences of commissioning / delays / the closure of mega-projects in the field of processing and programs to reduce fuel consumption, especially in the transport sector, ”the OPEC report said.

At the same time, in 2020, the organization expects an increase in oil supply from OPEC non-resident countries by 2.44 million barrels per day to 66.87 million barrels. It is noted that the United States, Brazil, Norway, Canada, Russia, Australia and Kazakhstan will become the main drivers of growth in oil supply, while Mexico, Colombia, Great Britain, Indonesia and Thailand, on the contrary, will decrease. “The forecast for a 2020 proposal by non-OPEC countries, despite the expected commissioning of new pipelines for transporting oil from the Permian basin in the amount of more than 2.5 million barrels per day, is subject to many uncertainties, including oil prices, investment management, hedging, inflation costs, unplanned downtime associated with technical problems, a delay in the commissioning of new projects and the duration of maintenance, ”the document says. In June, OPEC reduced oil production in monthly terms by 68 thousand barrels per day to 29.83 million, while in the framework of the OPEC+ transaction, the organization continued to overfulfill its obligations - in the reporting month by 22%. “Oil production declined mainly in Iran, Libya and Angola, while it grew in Nigeria and Saudi Arabia,” the report said. OPEC countries that pledged to reduce their oil production in the framework of the deal, reduced it in total compared to October 2018 by 987 thousand barrels per day against the promised 812 thousand. In particular, Saudi Arabia traditionally showed the largest reduction, having reduced production by 820 thousand barrels per day, having exceeded the agreement more than twice.

On July 1, the largest oil exporters included in OPEC+, following a two-day meeting in Vienna, signed an agreement to extend the deal to regulate oil production for the next 9 months until March 2020. The decision to extend the deal will be positive for oil prices, but trade wars will remain a key risk for the market, analysts say.

Source: wsj.com

USA plans sanctions against China over imports of Iranian oil

The US administration decided that China’s import of more than 1 million barrels of oil from Iran in June was a violation of US oil sanctions against Tehran. However, it has not yet been finally decided what kind of response Washington can give. Meanwhile, the US administration is actively calling for sanctions against Chinese companies acquiring Iranian oil, TASS reported.

The US government fears that China’s actions could undermine Washington’s position that the US sanctions policy against Iran is working. Increasing pressure on China in this matter is required from US President Donald Trump and US Republican lawmakers. At the same time, the introduction of such restrictions may complicate the already difficult trade negotiations between the two countries.

Sources: tass.ru, oilcapital.ru, July 12, 2019

As a result, the country’s oil production fell in September by 1.3 million barrels per day

The daily average production of the world’s largest oil exporter, Saudi Arabia, fell by 1.3 million barrels in September due to drone attacks on the country’s oil facilities, the OPEC report said. Now the production is restored.

On the night of September 14, 2019, 10 UAVs (unmanned aerial vehicles) attacked Khurais oil field and the primary oil refinery at Abqaiq field. After the bombing, a fire broke out, which was quickly put out. Nevertheless, the state-owned oil company Saudi Aramco announced a halving of oil production – to 5.7 million barrels per day. In Abqaiq there is a center for primary oil refining and bringing it to marketable quality, 50% of all the company’s oil goes through it, said Saudi Aramco. Hussite Yemeni rebels claimed responsibility for the attack, but the United States doubted that and blamed Iran for the attacks. Tehran rejected these allegations.

Saudi Aramco produced oil less than usual for two weeks. At the end of September, it managed to restore production, but the average daily rate for September still was low – 8.6 million barrels per day.

As soon as events in Saudi Arabia became known, WTI crude oil futures for November delivery rose by 16% to $ 63.64 per barrel, and Brent crude oil rose by 19.3% to $ 71.95. Prices have not grown so aggressively since 1988. A week later, after Saudi Aramco opened data on the progress of reconstruction, oil prices began to fall again.

There was an unsuccessful attempt to compensate the fall in production in Saudi Arabia in September by Libya (increased production by 104,000 barrels per day) and Angola (24,000 barrels per day). The total production of OPEC countries fell by 5% compared to August and amounted to 28.5 million barrels per day.

Sources: vedomosti.ru, interfax.ru