World traders cannot sell dirty oil from Russia

Traders Glencore and BP still cannot find buyers for Urals contaminated with organochlorine compounds, which the companies loaded onto tankers in the Russian port of Ust-Luga more than three months ago. In total, Urals buyers in the port of Ust-Luga received 15 batches of contaminated oil with a volume of 100 thousand tons each. This was reported by BusinessCensor with reference to Reuters.

According to the agency, about 600 thousand tons of contaminated Urals oil shipped in late April – early May are still on the water.

Most of this volume, 500 thousand tons, account for Glencore: about 300 thousand tons are on VLCC Amyntas, Searanger and Searuby have 100 thousand tons each.

BP has 100 thousand tons of Urals oil with a high content of organochlorine on the Fsl Shanghai tanker.
The company previously tried to sell this batch at a tender, but there were no interested parties.

BP and Glencore acquired a shipment of contaminated oil from Rosneft. As traders note, until companies sell goods, they cannot turn to sellers for compensation for losses.

“You can apply for compensation to the Russian side only after selling the oil and calculating your losses”, one of the sources in the trading community explained.

According to the agency, so far only Kazakhstani producers have agreed on compensation with the Russian Transneft, which ship oil in transit through the Russian Federation to the port of Ust-Luga.

The amount of compensation for them is agreed at $15 per barrel.
According to traders, in addition to Kazakhstani companies, no one has yet applied for compensation to Russian oil sellers, but the amount of compensation in applications of other affected buyers may be higher.

“Many Urals buyers believe that compensation of $15 per barrel is not enough”, said a trader at a major European company.

A number of buyers who have received contaminated oil at their refineries want compensation at $30 per barrel or more, two sources in trading community familiar with the negotiations said.

The incident with the pollution of Russian oil by organochlorine in Transneft oil pipelines occurred in late April, as a result of which about 5 million tons of the Russian export grade were infected. At least half of this volume was shipped to final consumers, many of which still have not been able to recycle or resell this oil. As a result of the crisis, Russian oil supplies to Europe via the Druzhba pipeline were also temporarily suspended.

Earlier it was reported that Ukrtransnafta had received part of the compensation for dirty oil.

Tags: contracts, oil, hydrocarbon production, tariffs, legislation, EU, The Minystry of Energy and Coal Mining, Ukrtransnafta, добыча нефти, RF, foreign affairs, OPEC, oil transit, export

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