Exclusive: Dirty Oil Crisis Over For Russia, But Contagion Felt On High Seas

www.oann.com | 2/26/2018 | Staff
ashb0101 (Posted by) Level 3
MOSCOW/LONDON (Reuters) – In the opinion of Russian officials, the oil contamination crisis that disrupted flows from the world’s second-largest exporter of crude this spring is long over.

But a closer look at a dozen tankers containing dirty Russian oil suggests that for the buyers, the debacle has a long way to run and will cost them hundreds of millions of dollars.

Months - Buyers - Russia - Oil - Chloride

Two months since buyers discovered Russia was shipping oil contaminated with organic chloride, which is designed to boost output but can destroy refining equipment, less than half of the tainted crude loaded on tankers has found end-users.

More than 1 million tonnes worth around $500 million remains homeless, zigzagging between Europe and Asia. In China, buyers have refused to take dirty Russian oil, forcing trader Vitol to send a cargo back to Europe.

Chinese - Development

The Chinese development has not previously been reported.

That means buyers are struggling to place oil even at discounts of $10-15 per barrel – or $10-15 million per regular Suezmax tanker – to the current, regular price of $65 a barrel.

Equipment - Crude - Oil - Trader - Refinery

“I’m not willing to risk our equipment just for cheap crude,” said an oil trader with a North Asian refinery.

Buyers have also paid millions of dollars in demurrage charges as tankers are stuck with the dirty oil, preventing ship-owners from sending them on new voyages.

Russia - Buyers - Claims

Russia has promised to compensate buyers after they file claims post-sale.

“The problem is that this oil is often impossible to sell. So how can I file a claim?,” a Russian oil buyer said.

Feeling - Russia - Issue - Meeting - Buyers

“Sometimes you have a feeling that Russia has moved on from the issue. There was a meeting with buyers at the beginning of June. Since then, we’ve had no communication whatsoever,” another major buyer said.

The Russian Energy Ministry and Transneft did not respond to a request for comment.



News of the dirty oil...
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